The Government's Goals In The Financial Industry: Bank Assets Must Be Larger Than National GDP

JAKARTA - The government through the Deputy Minister of Finance (Wamenkeu) Suahasil Nazara said that the number of banking assets in Indonesia compared to gross domestic product (GDP) is still relatively low.

According to him, in comparison, all national banking assets only account for 59.5 percent of GDP. In fact, the bank's business controls about 80 percent of the market share of the financial industry in the country, in addition to insurance, capital markets and pension fund management.

The Deputy Minister of Finance added that the government is trying to improve the ability of banks to enlarge assets so that it will further trigger economic activity. The reason is, one part of the bank's assets is credit.

So, if the credit that comes out (withdrawn by the community) is bigger, the economic signal is spinning faster that happens.

Based on the data he shared, it is known that Malaysia is able to carve bank assets of 198 percent of GDP. Then, the Philippines 99 percent, Singapore 572 percent, and Thailand 146 percent of banking assets to GDP.

“Many countries have their bank assets higher than their GDP, which is extraordinary. We are only 60 percent or even less, but the government continues to work towards it," he said during a meeting with the Legislative Body of the DPR, quoted on Friday, August 19.

Citing data reported by the Financial Services Authority (OJK), it is known that the total assets of Indonesian banking in May 2022 amounted to Rp. 10,180 trillion. This figure is higher when compared to the closing of 2021 which amounted to IDR 10,112 trillion.

"If we look at these figures, it seems that the financial sector in Indonesia can still grow faster or bigger because the business area is still very wide," said Deputy Minister of Finance Suahasil Nazara.