OJK Again Extends Credit Restructuring Until 2022

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - The Financial Services Authority (OJK) will issue a policy to extend OJK Regulation (POJK) No.11 / POJK.03 / 2020 related to relaxation of credit restructuring which should end on March 31, 2021 to March 31, 2022.

Chairman of the OJK Board of Commissioners, Wimboh Santoso, stated that the restructuring extension was decided in accordance with the results of evaluation and discussions with businessmen and banking circles.

"Yesterday we decided to extend it until 2022. Plus another year," he said, in an event entitled "CEO Networking 2020: Building Resilience to Economic Recovery", Tuesday, November 24.

Even though it was extended, Wimboh said customers who were able to pay credit were welcome to start repaying.

"This extension means that if customers who have money and can survive without an extension, please pay in installments. What is clear is that this provides room for banks and financial institutions to provide restructuring for other debtors," he said.

As of October 26, OJK noted that the bank had restructured as much as Rp932.4 trillion and was felt by 7.53 million debtors. From finance companies, it has reached IDR181.3 trillion for 4.87 contracts as of November 17, 2020.

According to Wimboh, without restructuring, the impact on banks will be quite significant. Among other things, the obligation to establish a reserve or allowance for impairment losses (CKPN) that can erode bank profits to cover bad debts that cannot be paid by debtors.

"Without this, the bank's profit and loss will be even greater because they have to make provisions for bad credit. This is temporarily postponed," he explained.

Furthermore, Wimboh also left the restructuring decision to banks. He said if there are debtors who no longer have the intention or are having difficulty staying afloat, the bank can immediately form a reserve.

"If it is hard and the entrepreneurs themselves are hard to get up, please just set up a reserve. Gradually it will not burden banks if it turns out that they cannot revive," he said.