TEMPO.CO, Jakarta - The Financial Services Authority (OJK) will provide an incentive for banks, in a bid to pursue low lending rates. The incentive will be in the form of a regulation on the minimum capital requirement for banks to open branches.
Banks that can lower their net interest margin (NIMs) and operating cost-to-operating income ratio (OERs) will be given a discount for the minimum amount of core capital allocation for the opening of new branches. This will allow banks that are planning to open new branches to have higher capacities.
"The current rules to open new branches are quite disincentive. There will be a new rule that can serve as an incentive for banks," OJK chief executive for banking supervision Nelson Tampubolon said on Thursday, April 28, as quoted by Antara.
The regulation will be published in the form of OJK's circular (SE-OJK) on the Opening of Commercial Banks Networks based on Core Capital. The regulation will also stipulate the minimum OER eligible for the incentive.
To get the incentive, BUKU III and BUKU IV banks must have an OER of less than 75%. Meanwhile, BUKU I and BUKU II banks must have OERs lower than 85 percent. As for the NIM, all banks with NIMs lower than 4.5 percent will get the incentive.
Nelson said the new rule can increase banks' efficiency, which would allow them to disburse more credit with lower interest rates.
ABDUL MALIK