The National Banking Is Sure That The Credit Growth Could Reach 7.13 Percent Throughout 2021

Bank illustration (Photo by courtesy)

JAKARTA - Chief Executive of the Banking Supervision of the Financial Services Authority (OJK) Heru Kristiyana said that banking businesses are quite optimistic in facing the 2021 business year.

"This is reflected in the average RBB (bank business plan) which was reported to us that credit could grow at 7.13 percent", he said in a webinar, Thursday, February 18.

According to Heru, this confident attitude is important to encourage and contribute to national economic recovery through intermediation activities.

"However, we still provide directions to prioritize the principle of prudence considering that credit risk is very likely to occur in the future", he said.

The OJK is targeting the growth of bank credit in 2021 to reach 7.5 percent with a plus-minus 1 percent.

Meanwhile, the conservative credit projection is said to be at the level of 5 percent in 2021 if a number of bad scenarios occur, such as the handling of the pandemic that cannot be managed properly.

For information, the authorities revealed that bank credit growth in 2020 contracted minus 2.41 percent. In its report, the institution headed by Wimboh Santoso explained that the drop in credit was greatly influenced by a decrease in the debit balance of large corporations, which was caused by not yet optimal production capacity due to weak demand.

Then it was also mentioned that several corporations had policies to reduce the debit balance of loans in order to reduce interest expenses.