OJK Asks Islamic Banks to Lower Non-Performing Loans
7 March 2014 13:28 WIB
TEMPO.CO, Jakarta - Edy Setiadi, chief of Islamic banking department at the Financial Services Authority (OJK) asked Islamic banks to lower the ratio of non-performing loans or non-performing financing (NPF). Currently, Islamic banks' NPF ratio is in the range of three percent, higher than average ratio of conventional banks' of around two percent.
"When the NPF reaches a high number, it will affect banking performances," Edy said as quoted by Antara, Thursday, March 6.
Therefore, he said it would be better for Islamic banks to accelerate their capital flow. "We must prevent a quick growth that is accompanied by slow financing—it will lead to an NPF [ratio] increase."
To anticipate a surge in the NPF, Edy said Islamic banks should follow the pace of conventional banks' capital flow. As for Islamic banks owned by large conventional banks, Edy believes they are quite safe; as they can always ask the holding banks for capital injection should any shortages occur.
RR ARIYANI | GALVAN YUDISTIRA