Breaking News
Investing Pro 0
Cyber Monday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

Indonesia to extend loan relief for some pandemic-hit sectors

Economy Sep 06, 2022 09:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Labours work on a construction as smog covers Jakarta, Indonesia, June 24, 2021. REUTERS/Willy Kurniawan

JAKARTA (Reuters) - Indonesia's financial regulator plans to extend regulations for loan forbearance for some sectors that have yet to recover from the impact of the COVID-19 pandemic beyond a March 2023 deadline, a senior official said on Tuesday.

The Financial Services Authority, known by its Indonesian acronym OJK, has since March 2020 provided incentives to banks to restructure loans for debtors suffering during the pandemic.

The rules means lenders do not have to set aside provisions for souring loans and have helped prevent a spike in the non-performing loan (NPL) ratio.

Dian Ediana Rae, OJK's newly appointed chief banking supervisor, said policymakers had already agreed to selectively extend the regulation, but were still discussing how long this should be for and the sectors it should apply to.

A decision would formally be announced in the coming two months, he said.

"The extension won't be given across the board...to make sure it won't create a moral hazard," he told a news conference.

As of July, the amount of loans under restructuring by debtors affected by the pandemic stood at 560.41 trillion rupiah ($37.65 billion), OJK data showed, compared with more than 900 trillion rupiah in 2020.

The NPL ratio was at 2.9% in July.

The food, real estate and accommodation sectors had not yet recovered from the pandemic, Dian said, without confirming what sectors that would be covered by the extension.

Ratings agency Fitch in a market commentary issued last week said Indonesian banks had built a moderate level of provision covering 200% of NPLs as of April and around 64% of total outstanding loans under restructuring in connection with the pandemic, in preparation for the winding down of OJK's regulatory forbearance.

Slamet Edy Purnomo, a deputy commissioner for banking supervision at OJK, told the same event that the banking industry has revised its 2022 loan growth target to 10.33%, up from 9.5%, according to media reports, due to strong demand.

($1 = 14,885.0000 rupiah)

Indonesia to extend loan relief for some pandemic-hit sectors
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email