Banks Could Lose Customers, Minister Predicts

TEMPO.CO, Jakarta – Chairul Tanjung, Coordinating Minister for Economic Affairs, predicted that banking customers will migrate to non-bank financial institutions after the Financial Services Authority (OJK) capped the ceiling for third party funding (TPF) interest rates. The policy, Tanjung said, would make the yield of non-bank products appear more attractive than banking products.

At the end of September, the OJK set a limit on the interest rates of time deposits at 7.75 percent for deposit account of up to Rp billion. For book 4, the interest rate is set at 9.50 percent, while book 3's was set for 9.75 percent.

The rule, which was put into effect on October 1, 2014, was made to prevent the industry from suffering the negative impacts of interest rate competition.

Chairul said the rule will enable the government to have strict control over the financial industry, and tone down the interest rates war between banks. In addition, the policy will provide ample scope for customers to migrate to non-bank financial institutions.

Heery Gunardi, Bank Mandiri's micro and retail banking director, said there are no signs of customer migration yet, as the rule has only been effective for two days. Bank Mandiri, he said, has no problem with the new policy as long as it is applied equally to all players in the industry.

Bank Mandiri is still reviewing the possibility of lowering its deposit rates.

Meanwhile, Bank Central Asia (BCA) president director John Setiaadmadja said the company has lowered its interest rates in accordance with market mechanisms. In August, BCA had lowered its time deposit interest rate from 9.25 percent to 9 percent. In Septemver, the rate was lowered again to 8.5 percent in September. As of October 1, BCA lowered it again to 8.25 percent. 

JAYADI SUPRIADIN | MAYA NAWANGWULAN | FAIZ NASHRILLAH