OJK Announces COVID-19 Credit Restructuring Ends

Chairman of the OJK Board of Commissioners Mahendra Siregar. (Photo: Doc. ANTARA)

JAKARTA - The Financial Services Authority (OJK) announced the policy of restructuring bank credit for the impact of COVID-19 ending on March 31, 2024.

"Finally, the policy is consistent with the revocation of the status of the COVID-19 pandemic by the government in June 2023, as well as considering the Indonesian economy which has recovered from the impact of the pandemic, including the conditions of the real sector," said OJK Board of Commissioners Mahendra Siregar as quoted from ANTARA, Sunday, March 31. OJK assesses that Indonesia's banking condition currently has a strong durability in dealing with the dynamics of the economy, supported by a strong level of capital, adequate liquidity, and good risk management.

Therefore, the banking industry is considered to be ready to face the end of the COVID-19 credit restructuring policy. This is also supported by continued economic recovery, with controlled inflation rates and investment growth.

In line with this, since the issuance of Presidential Decree Number 17 of 2023 in June 2023 which stated that the status of the COVID-19 pandemic in Indonesia has ended, people's economic activities continue to increase.

The credit restructuring issued since early 2020 has been widely utilized by debtors, especially micro, small and medium enterprises (MSMEs).

The credit restructuring stimulus is part of a countercyclical policy and is a very important policy (landmark policy) in supporting the performance of debtors, banks, and the economy in general to get through the pandemic period.

Various indicators in January 2024 showed that Indonesia's banking was in good condition, reflected in the capital adequacy ratio (CAR) at the level of 27.54 percent, the liquidity condition shown by the Liquidity Coverage Ratio (LCR) of 231.14 percent and Liquid/Non Core Deposit (AL/NCD) devices of 123.42 percent and adequate level of reliability. "This is expected to be a solid risk mitigation cushion in the midst of uncertain global economic conditions," he said. Meanwhile, credit quality is maintained below the 5 percent threshold, namely NPL Gross by 2.35 percent and NPL Nett by 0.79 percent.