The Financial Services Authority Claims The Number Of Banks Continued To Decrease During The Pandemic

Illustration of banking activities (Photo: Special)

JAKARTA - Deputy Commissioner for Banking Supervision I of the Financial Services Authority (OJK) Teguh Supangkat said that the number of banking actors has continued to decrease in the past year, especially for the segmentation of commercial banks.

"Indeed, during the COVID-19 pandemic, the number of banks had a downward trend due to mergers, consolidations, and acquisitions", he said in a webinar, Friday, April 30.

Teguh added that the current reduction in the number of banks cannot be separated from OJK's Regulation Number 12/POJK.03/2020 dated March 16, 2020, concerning Commercial Bank Consolidation which has been in effect since it was promulgated on March 17, 2020.

The regulation encourages the banking industry to carry out consolidation efforts with the aim of strengthening the capital side so that banks can run a stronger business.

Meanwhile, the bank's core capital was increased from IDR 100 billion to IDR 3 trillion at the end of December 2022.

As a result, the number of banks, especially those on a small scale, has decreased due to the merger or acquisition process in order to increase the scale of the business.

"If it is reduced, surely the banks will have reviewed it in terms of management and governance", he said.

Based on data released by the Deposit Insurance Corporation (LPS), the number of banks at the end of last year was 111 commercial banks. This figure is reduced in early 2021 after PT Bank Mitraniaga merged into PT Bank Agris.

Meanwhile, the number of savings accounts in January 2021 is known to be 352.728.934 accounts, or larger than the same period in 2020 with 303.132.916 accounts.

"In the future, the number of banks will continue to decrease because the regulation regarding the limit of bank core capital is still required until next year's adjustment", Teguh concluded.