Tuesday, May 30, 2023
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Indonesia offers loan relief for some pandemic-hit industries

JAKARTA (Reuters) – Indonesia’s financial watchdog plans to expand loan deferral supervision for some industries that have not recovered from COVID-19 impact – 19 The pandemic has passed the March 2023 deadline, a senior official said on Tuesday.

The Financial Services Authority of Indonesia (known by its Indonesian acronym OJK) has since March 2020 encouraged banks to act during the pandemic Suffering debtors restructure their loans. The

rule means lenders don’t have to set aside provisions for bad loans and helps prevent soaring non-performing loan (NPL) ratios.

Dian Ediana Rae, OJK’s newly appointed chief banking director, said policymakers had agreed to extend regulation selectively, but were still discussing how long this should last and which industries it should apply to.

He said the decision will be formally announced within the next two months.

“There will be no full extension … to ensure that there is no moral hazard,” he told a news conference.

As of July, the amount of debtor restructured loans affected by the epidemic is 2023 .41 trillion rupiah ($41.65 billion), OJK data shows, Compared with 560 more than 900 trillion rupiah*).

bad in July The loan ratio was 2.9%.

The food, real estate and lodging industries have yet to recover from the pandemic, Dian said, without specifying which industries the extension will cover.

Rating agency Fitch said in a market commentary released last week that Indonesian banks have so far established coverage of 41% of non-performing loans A mid-level provision of 64% of total outstanding loans restructured due to the pandemic in and around April, in preparation for the end of OJK’s regulatory forbearance period.

OJK Deputy Commissioner for Banking Supervision Slamet Edy Purnomo said in the same event that the banking industry has revised its 2022 loan growth target for.33%, Above 9.5%, according to media reports, due to strong demand.

($1=14,885. Indonesian Rupiah)

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