Airlangga Reveals OJK Signals Disagree Of Extended COVID-19 Credit Restructuring

Coordinating Minister for Economic Affairs (Menko) Airlangga Hartarto. (Photo: Doc. ANTARA)

Coordinating Minister for Economic Affairs Airlangga Hartarto estimates that the Financial Services Authority (OJK) will not approve the plan to extend the COVID-19 credit restructuring until 2025.

"OJK doesn't seem to agree (extended COVID-19 credit restructuring)," he said after the One Map Policy Summit 2024 event, Thursday, July 11.

Airlangga said the government would see the whole thing in terms of People's Business Credit (KUR) because there was a request from insurance to increase the number of reserves.

"The indicator is that if there is an increase in insurance, the risk problem will increase. The risk of increasing is related to credit that has the potential for problems," he said.

Therefore, Airlangga said that the government was conducting a review to be able to carry out similar policies.

"We will study, there are other ways that we can study in the KUR policy. Previously, we created a middle class but it seems that the lower middle class banks feel quite resilient. Of course we will look at KUR specifically," he explained.

Previously, OJK Chairman Mahendra Siregar said the decision to revoke the credit restructuring policy had gone through careful calculations and deep considerations on banking conditions and the national economy.

"When the OJK stipulates an end to the restructuring policy for credit that affects the Covid-19 pandemic, it is also calculated how much injury is said to be bruises or scarring effects from this pandemic, on banking conditions and developments in the economy as a whole," Mahendra said during a press conference on the results of the OJK Board of Commissioners' Meeting (RDK), Monday, July 8.

Mahendra said, if you look at the remaining amount of COVID-19 restructuring credit, it continues to show a downward trend since the policy ended in March 2024.

Based on OJK data, the remaining credit for COVID-19 restructuring in May 2024 was recorded at IDR 192.52 trillion.

This number decreased compared to April 2024 which was 207.40 trillion, and Rp372.07 trillion in May last year.

"This figure means that it continues to decline compared to the end and also compared in April. With the distribution that the amount of restructuring which is certainly divided by two is targeted, which is Rp72.7 trillion, and the total total restructuring of COVID-19 is Rp119.8 trillion, so that the total amount is Rp192.52 trillion," he said.

The remaining COVID-19 restructuring credit as of May 2024, he continued, was much smaller than the peak period for the restructuring needs that occurred in October 2020 which amounted to IDR 820 trillion.

In addition, the number of debtors also continues to decline in the range of 702,000 debtors, compared to the initial period of restructuring of 6.8 million debtors, or almost 10 times.

Mahendra said that the banking had formed a very adequate Value Lowering Losses Reserve (CKPN) due to coverage in terms of 33.8 percent.

This certainly shows that banks generally implement good risk management and prisncip of prudence.

"That the banking industry in general has performance, both supported by high capital levels and we assess that it is capable of not only maintaining good durability to potential future risks, but also what we understand is that the target for 2022 that has been set for both credit disbursement and the DPK target is currently optimistic that banks can achieve it," he concluded.