Asbanda Urges Equal Opportunities for Regional Development Banks in Government Transactions
The Association of Regional Development Banks (Asbanda) is pushing for the creation of equal opportunities for Regional Development Banks (BPD) in various government programmes and transactions. Asbanda is also advocating for the strengthening of BPDs’ role as Regional Development Banks to support regional economic development and the resilience of the national financial system.
Asbanda Chairman Agus Haryoto Widodo said that BPDs are not asking for protection from competition as long as they are able to meet technology, governance, service, and risk management standards. “We are not asking for protection. We are asking for a level playing field. BPDs must be ready to compete through service quality, digital capability, and governance,” Agus said during a seminar titled “Government Support for Strengthening BPD Liquidity in Enhancing National Financial System Stability” in Bengkulu on Friday (21/8/2026), according to a press release.
The seminar was attended by Deputy Chairman of Commission XI of the Indonesian House of Representatives Fauzi Amro, officials from the Bengkulu Provincial Government, and directors of BPDs from various regions.
As of June 2026, the total assets of 27 BPDs reached approximately Rp1,043 trillion, with loans of around Rp673 trillion and third-party funds of around Rp770 trillion.
Agus said that fundamentally, the condition of BPDs remains healthy. However, the growth of intermediation functions amid pressure on funding sources needs to be monitored so as not to increase the cost of funds and limit the ability of BPDs to channel financing competitively.
“BPD liquidity is not merely a matter of bank balance sheets. BPD liquidity is part of regional development capacity,” Agus stressed.
According to him, BPDs play a role in financing various regional economic sectors, from MSMEs, food, housing, health, education, transportation, to infrastructure.
The liquidity structure of BPDs also has its own characteristics because it is closely related to regional fiscal cycles, transfers to regions, regional budgets, and various transactions within the regional government ecosystem.
Therefore, Agus believes that changes in fiscal design and government fund distribution mechanisms need to consider their impact on the resilience of the regional financial ecosystem.
“Policy efficiency remains important. However, we also need to maintain a balance between central efficiency and regional financial resilience, so that economic activity and liquidity can continue to provide optimal multipliers for regions,” Agus said.
Asbanda is also encouraging that government fund placements in BPDs be increasingly directed towards strengthening intermediation to productive sectors. These funds can be linked to financing priority sectors such as MSMEs, food, housing, health, education, and regional infrastructure.
“Government funds should not stop at being liquidity. We need to encourage them to become multipliers for regional economic growth,” Agus said.
In addition, Asbanda is urging that national policies consider the impact on regional development because BPDs have characteristics and functions that differ from commercial banks in general.
BPDs not only carry out intermediation functions but also play a role in managing the regional financial ecosystem, expanding financial inclusion, and financing regional development.
On the other hand, Agus stressed that strengthening BPDs is not solely the responsibility of the government and regulators. Asbanda and all BPDs also need to improve competitiveness through strengthening collaboration in liquidity management, money markets, repos, treasury, and financing syndication.
BPDs also need to accelerate digital transformation, strengthen cybersecurity, governance, and risk management, as well as increase the proportion of current and savings accounts from the public and businesses.
“We do not want BPDs to be protected from competition. We want BPDs to be strengthened so they are able to compete,” Agus asserted.
With total assets exceeding Rp1,000 trillion and a network spread across various regions of Indonesia, Asbanda is encouraging BPDs to strengthen their capacity as healthy, digital, and competitive Regional Development Banks.
“A strong national financial system cannot possibly be built only from the centre. It requires strong roots in all regions, and BPDs are one of those roots. When BPDs become stronger, the beneficiaries are not only the BPDs, but the regions and ultimately Indonesia,” Agus said.