JAKARTA - Bank Indonesia (BI) said that banks in the country were very slow in adjusting credit interest even though BI had cut the BI benchmark interest rate to reach the lowest level, namely 3.75 percent.
Even banks tend to be 'lazy' to reduce credit interest for their customers. This was stated by Assistant Governor of the Macroprudential Policy Department, Juda Agung in a virtual presentation, Monday, February 22 yesterday.
He noted that the Prime Lending Rate (SBDK) was relatively high for all credit segments in 2020. For mortgage interest, as of December 2020, the decline in credit was stuck at 9.7 percent or only down 116 basis points (bps) while BI has lowered the BI7DRR interest rate by 225 bps since June 2019.
"This means that people do not enjoy cheap credit when BI provides concessions to banks in Indonesia as a response to the COVID-19 pandemic", said Juda.
On the other hand, continued Juda, banks were actually responsive to the decline in deposit rates. In December 2020, the 1-month deposit rate fell 181 bps to a level of 4.27 percent.
Juda said banks should be responsive to all segments, not only on favorable interest rates.
"The interest rates for bank credit with BI for 7 days have even widened. This means that banks are trying to get more profits at times like this", he said.
Juda said that the move to hold down credit rates has the potential to make the economy unfavorable. This is one of the factors that debtors are reluctant to ask for credit from banks because the interest rates are still exorbitant.
"If interest rates go down, the economy should recover soon but this is the opposite, so people hesitate to ask for credit from banks because the interest rates are still quite high", he explained.
For information, until the end of 2020, for SBDK based on bank groups, BI noted that the Himbara group had the highest SBDK at 10.79 percent and was followed by Regional Development Banks (BPD) at a 9.8 percent level. Then the National Private Commercial Bank (BUSN) by 9.67 percent.
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