JAKARTA - The Deposit Insurance Corporation (LPS) raised the interest rate for foreign exchange deposit guarantees (varlas) in commercial banks by 25 basis points (bps) to 2 percent.
"The LPS Board of Commissioners meeting determined to increase interest rates in commercial banks and BPR by 25 basis points with interest details for public banks to 4 percent, foreign exchange 2 percent and BPR 6.5 percent," said Chairman of the LPS Board of Commissioners Purbaya Yudhi Sadive at a press conference in Jakarta, Thursday, January 26.
The guarantee rate is valid for the period 1 February 2023 to 31 May 2023.
Purbaya added that the decision to raise the interest rate of this deposit guarantor by considering several things, including the potential for a higher increase in domestic banking interest rates in responding to central bank monetary policy.
"LPS provides space for banks in liquidity management amidst the relatively high risk of financial market volatility while remaining supportive of the banking intermediation function as the main pillar of economic growth," he explained.
Based on LPS Regulation Number 1 of 2018, LPS regularly stipulates TBP three times a year, namely in January, May, and September, unless there is a change in economic conditions and significant developments.
"Thus, if the results of the evaluation of the development of economic and banking conditions show that there is a faster and more significant change in the impact on the determination of TBP, LPS can make changes outside of the regular period," continued Purbaya.
In accordance with LPS provisions, if the deposit interest rate promised between the bank and the customer of the store exceeds the deposit guarantee interest rate, then the customer's deposit is not guaranteed.
"In this regard, banks are required to notify storage customers about the applicable deposit Insurance Rate and the maximum value of the deposit guaranteed by LPS by placing the information in a place that is easily known by the customer of the store," he said.
In line with the aim of protecting customers and expanding the coverage of guarantees, LPS urges banks to pay more attention to the provisions on the interest level of deposit guarantees in the context of raising funds.
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