Increase In Positive Credit Limit Ratio For Banks

Increase in Positive Credit Limit Ratio for Banks

Finance Minister Sri Mulyani (third left) together with Coordinating Minister for the Economy Airlangga Hartarto (second left), Industry Minister Agus Gumiwang Kartasasmita (left), Second Ojk Wimboh Santoso (second right), and Trade material Agus Suparmanto (right) provide information regarding the second stimulus handling The Impact of Covid-19 at the Office of the Coordinating Ministry for Economic Affairs, Jakarta, Friday, March 13, 2020. TEMPO / Sintia Nurmiza

Finance Minister Sri Mulyani (third left) together with Coordinating Minister for the Economy Airlangga Hartarto (second left), Industry Minister Agus Gumiwang Kartasasmita (left), Second Ojk Wimboh Santoso (second right), and Trade material Agus Suparmanto (right) provide information regarding the second stimulus handling The Impact of Covid-19 at the Office of the Coordinating Ministry for Economic Affairs, Jakarta, Friday, March 13, 2020. TEMPO / Sintia Nurmiza

, JAKARTA - Chief Economist of PT Bank Central Asia (PT) David Sumual say discourse Financial Services Authority to increase the ratio of Limit Provision of credit the bank could be positive for the banking industry. As is well known, one of the main banking revenues comes from lending. "It could be relaxed, but it still needs to be accompanied by other policies," he said, Tuesday, June 30, 2020.

David said if the OJK was to impose relaxation of credit capacity in the corporate segment of the tourism sector, the output would not necessarily be according to plan. Because, currently the tourism industry is exhausted because corona makes people afraid to travel. As a result, if there is an abundant supply of credit upstream, credit absorption may remain unchanged.

"The problem is now in the demand for credit," he said. Therefore, David said there needed to be a further step especially in supporting sectors such as transportation. However, he said that the credit demand would also not directly remain as in the period before covid. Sentiment and pandemic outbreaks, he said, are still unknown when it ends.

This, said David, makes the arrival of foreign tourists who have large expenditure capacity will still be minimal arrival. "It could also optimize domestic tourists as a solution," he said.

Previously, Chairman of the Board of Commissioners of the Financial Services Authority Wimboh Santoso said the relaxation of the LLL was included in the institution's continued program. According to him, there needs to be a widening of space for banks to extend credit to encourage the financial industry to quickly recover from the negative impact of corona.

Launching the Financial Services Authority data, the performance of the financial industry, especially banking industry is plummeting with annual credit growth in May 2020 only 3.04 percent.

Wimboh said that the granting of relaxation would indeed target interrelated sectors. According to him the extension of credit limits in the tourism sector will be supported by the transportation and restaurant sectors.

"The priorities are the three sectors," said Wimboh. "We are optimistic that credit will also begin to grow close to normal because the busy period of banking restructuring is over in April-May," he said.

Deputy Chairman of the Indonesian Hotel and Restaurant Association Yusran Maulana said that the government's full support for the acceleration of the revival of the tourism sector could not be focused on the core tourism sector alone. Transportation, he said, which is one of the important factors in bringing tourism is not pocket friendly for travelers.

"You have to pay for your own swap test, if you go by land, it will also take time," he said.

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