OJK Ensures No Indonesian Financial Institutions Are Directly Related To SVB

Photo: Doc. Antara

JAKARTA - The Financial Services Authority (OJK) ensures that no financial institution in Indonesia has a direct connection with Silicon Valley Bank (SVB) in the United States, which on March 10, 2023, has been closed.

"So far, there has been no direct observation," said OJK's Chief Executive of Insurance, Guarantee and Retirement Fund Ogi Prastomiyono at an international seminar related to a credit assessment institution in Nusa Dua, Bali, quoted from Antara, Thursday, March 16.

So far, he continued, after the closure of the SVB by the United States Federal Deposit Insurance Corporation (FDIC), the impact felt was only limited to psychology on the financial industry.

The regulator ensures that no bank in the country has a status that requires resolution, for example, banks in restructuring and under supervision.

"This means that so far it has been good, hopefully this is just a psychological impact, maybe there is a fear that there could be a rush, but we can assure you that the condition of Indonesian financial services institutions is relatively good," he added.

According to him, Indonesia's economic fundamentals are in good condition as shown by a number of indicators, including bank credit growth which grew above 10 percent.

Not only that, he continued, non-performing loans (NPL) were also controlled so that the relaxation program from the OJK related to MSME loans was still provided.

"We take a relaxation policy that will still be given to MSMEs, the food and drink sector and for Bali there is still relaxation, finance companies for the MSME segment are also still relaxing," he said.

Previously, the OJK stated that the closure of the SVB had no direct impact on Indonesian banks because it had no business relationship or investment in securitization products in SVB.

In addition, unlike SVB and banking in the US in general, banks in Indonesia do not provide credit and investment to startups and crypto technology companies.

The OJK stated that the condition of banking in the country shows good liquidity performance, namely liquid equipment/non core deposits (AL/NCD) and liquid assets/ Third Party Funds (AL/DPK) which are above the threshold of 129.64 percent and 29.13 percent, which are far above the threshold of 50 percent and 10 percent, respectively.