TEMPO.CO, Jakarta -Bank Indonesia (BI) governor Agus Martowardojo said the banking industry should be on alert for non-performing loan (NPL) ratio hikes in the second half of this year. His warning is based on the recent G-20 forum, in which member countries signaled a downtrend in corporate finances, especially in foreign loan disbursements.
"Although conditions are quite well, the banking industry will face many challenges," he said last weekend.
Agus said that national banks are anticipating for an increase in NPL ratios, which stood at a little over 3 percent (gross) or 1.6 percent (net) in June.
He said there is no need for excessive concerns, as credit growth will improve with increasing demand.
In June, credit growth rate was 8.9 percent. Agus is confident that the inflow of funds repatriated using the tax amnesty scheme, allocated to the real and financial sectors, will boost credit by the end of this year.
"The tax amnesty has begun, it could raise credit by two percent," he said.
In the second half, Agus estimated credit growth could reach 10-11 percent, supported by the disbursement of infrastructure development budget and private lending.
GHOIDA RAHMAH