Asbanda Chairman: Regional Development Banks Must Become Orchestrators of Regional Finance, Not Merely Fund Distributors
Chairman of the Association of Regional Development Banks (Asbanda), Agus H. Widodo, emphasised that Regional Development Banks (BPD) must transform into the primary force in managing regional economies, in line with the dynamics of fiscal policies and pressures on Transfers to Regions (TKD).
This was stated at the Asian Post Best Regional Champion Forum 2026 held in Solo on Thursday, 16 April 2026. “In the future, the strength of the regional economy will not only be determined by the Regional Budget (APBD), but also by how effectively BPD can manage, mobilise, and accelerate the flow of funds in the region,” Agus said.
BPD Must Level Up
In his speech, Agus stressed that the role of BPD can no longer be limited to passive financial intermediation institutions.
“BPD must not merely serve as a parking place for regional government funds. BPD must level up to become orchestrators of regional financial management, guardians of liquidity stability, and accelerators of regional economic growth,” he asserted.
According to him, regional cash transfer policies have strategic implications for liquidity, development capacity, and the sustainability of regional economic growth.
Fiscal Challenges as Momentum
Agus also highlighted the pressures on TKD in the State Budget (APBN), which could narrow fiscal space for regions, squeeze development spending, and impact local economic activities.
Nevertheless, he views this situation as a strategic opportunity for BPD to take on a larger role.
“These challenges are actually a momentum for BPD to optimise regional fund management, strengthen intermediation to productive sectors, and build a more integrated regional economic ecosystem,” he explained.
Three Strategic Directions for Strengthening BPD
At the forum attended by the Director General of Regional Financial Development from the Ministry of Home Affairs, Agus Fatoni; Chair of the Association of Government-Owned People’s Economic Banks (PERBAMIDA), Sofia Nurkrisnajati Atmaja; as well as managing directors and directors of BPDs across Indonesia, Agus also outlined three main focuses for strengthening BPD moving forward, namely:
Strengthening governance and risk management to enhance credibility and public trust
Digital and operational transformation to improve efficiency and service quality
Strengthening roles in the regional ecosystem, including support for MSMEs and productive sectors
BPD as a Solution for Regional Economies
Agus emphasised that amid fiscal limitations, BPD holds a strategic position as a solution in supporting regional development. “In the midst of fiscal constraints, BPD is the solution, not just a complement,” he said.
He also expressed appreciation to Infobank Media Group for organising the forum, which is seen as consistently driving improvements in the quality of the regional banking industry.
Encouraging Synergy for Strengthening Regional Economies
Through this forum, Asbanda hopes to create stronger synergies between the central government, regional governments, regulators, and the regional banking industry in strengthening the role of BPD.
“We are optimistic that BPD will increasingly be able to become strategic partners for regional governments, guardians of regional financial stability, and engines of sustainable economic growth,” Agus concluded.