Minister Of Finance Purbaya Criticizes Banks Who Reluctant To Distribute Loans To The Productive Sector

Minister of Finance Purbaya Yudhi Sadive (Photo: Doc. VOI)

JAKARTA - Minister of Finance Purbaya Yudhi Sadivewa expressed criticism of the attitude of banking directors which he considered too comfortable with the current liquidity situation.

In addition, he assessed that bankers tend to choose safe steps and lack the initiative to push credit into the productive sector.

"Basically I told them to think for themselves. They are smart people. Only all this time it's been hard because they can work in a safe place, don't do anything, get enough spread, big profit. So they play golf every Saturday," he explained at the DJP Headquarters, Tuesday, September 16.

Purbaya explained that the placement of Rp200 trillion in funds in state-owned banks aims to be a stimulus to encourage economic growth, with abundant liquidity, banks are expected to be more active in seeking financing for productive and relatively safe projects.

He added that interbank competition in lending will encourage a reduction in loan interest rates.

"Now with that money they think. And it should be market base. They will look for projects that provide the highest and safest returns first. That will cause competence among the banks. It will press interest rates down on loans," he said.

Purbaya also emphasized that government funds placed in banks are neither loans nor subsidies.

According to him, the funds were transferred from Bank Indonesia to commercial banks so that they could be used more productively in order to encourage the wheels of the national economy.

Responding to concerns about potential inflation due to injection of funds, Purbaya stated that these concerns are irrelevant in sluggish economic conditions and, as long as demand is not high, additional liquidity will actually be absorbed by the system without causing a price spike.

Some people say that if the money is injected, the system will cause inflation. Yes, maybe in the long term and the money is mostly. Yesterday, we were sluggish, the economy with it would definitely be absorbed by the system," he said.

Purbaya is optimistic that this policy will show results in a short time and also exemplify the experience in 2021, where credit distribution can recover in just a few months, and predicts economic recovery will be seen soon.

Furthermore, he said that faster economic growth would also have a positive impact on state tax revenues.

According to him, an increase in economic growth by 0.5 percent could increase tax revenue by more than Rp100 trillion.

"So I put the money seeds in the bank with the hope that the economy will run so that in the end my taxes will increase. Not with intensification, but with extensification, but because the economy is growing faster," he said.