BI sets deadline for banks to cut rates<\/p>\n
JAKARTA (JP): Bank Indonesia (BI) has set a deadline of April
\n15 for commercial banks to comply with its newly established
\nceiling for deposit rates.<\/p>\n
BI director for commercial bank supervision and development,
\nMukhlis Rasyid, said in a circular letter Wednesday that a Feb.
\n27 regulation establishing a ceiling on deposit rates would come
\ninto force April 16.<\/p>\n
The regulation sets a ceiling for bank time deposit rates at
\n1.25 times BI's short-term promissory note (SBI) rates.<\/p>\n
Mukhlis said the central bank, however, had set a temporary
\nceiling for the deposit rates at 1.5 times its SBI rates for the
\ninterim period leading up to April 16.<\/p>\n
Banks which have provided deposit rates higher than the set
\nceiling before the issuance of the circular letter will be
\nallowed to maintain the rate until the deposit matures, Mukhlis
\nsaid.<\/p>\n
"For banks which continue to offer deposits with rates higher
\nthan the ceilings ... the government will not guarantee those
\ndeposits," he said.<\/p>\n
BI also has required banks to notify their customers that the
\ngovernment may lift its bank deposit guarantee for banks
\nviolating the rate ceilings.<\/p>\n
The government guaranteed all deposits and other obligations
\nof domestic banks, including joint-venture banks, last January in
\na bid to restore public confidence in the banking system.<\/p>\n
Public confidence in domestic banks diminished following a
\ngovernment closure of 16 private banks last November. The move
\nprompted people to divert their savings from domestic private
\nbanks to foreign or state banks.<\/p>\n
The government's blanket guarantee on all bank obligations has
\nmade the risks of saving money in each bank more or less the
\nsame, making interest rates the major factor in choosing banks.<\/p>\n
In order to ease a growing interest rate war, BI decided to
\ncap deposit rates by tying them to the SBI rates.<\/p>\n
SBI rates currently range from 40 percent for a one-day SBI to
\n16 percent for a one-year SBI. The rates for two days, three to
\nsix days, one week, two weeks, one month, two months, three
\nmonths and six months stand at 35 percent, 28 percent, 25
\npercent, 24 percent, 22 percent, 20 percent, 19 percent and 18
\npercent respectively.<\/p>\n
As of yesterday, a number of banks had reduced their rupiah
\ndeposit rates. But most rates remained high.<\/p>\n
State banks like Bank Dagang Negara, Bank Rakyat Indonesia and
\nBank Bumi Daya, for instance, had cut their rates by 100 basis
\npoints to 26 percent for one month and three months and 20
\npercent for six months and one year.<\/p>\n
Bank Subentra offered rates of 27 percent, 24 percent, 22
\npercent and 20 percent for one month, three months, six months
\nand one year deposits respectively.<\/p>\n
For the same maturity periods, Bank BDNI's rates were 25
\npercent, 22 percent, 20 percent and 20 percent respectively. Bank
\nPSP's rates were 22 percent, 19 percent, 18 percent and 16
\npercent, while Bank Bali's rates were 32 percent, 28.5 percent,
\n27 percent and 24 percent. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-sets-deadline-for-banks-to-cut-rates-1447893297",
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"sponsor": "Okusi Associates",
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