Bank Deposit War Intensifies as LPS Hikes Guaranteed Interest Rates

The Indonesia Deposit Insurance Corporation (LPS) has abruptly decided to increase the guaranteed interest rate (TBP) to 3.75% for deposits in commercial banks and 6.25% in rural banks (BPR). The decision was taken during the Board of Commissioners Meeting (RDK) in June 2026 and is valid for the period from 1 July to 1 September 2026.

LPS Board of Commissioners Member for the Deposit Guarantee and Bank Resolution Programme, Doddy Ariefianto, revealed the decision was based on the tendency for rupiah deposit interest rates across all bank groups to continue rising. He stated this condition is the banking sector’s response to developments in policy interest rates and financial market conditions, both globally and domestically.

Meanwhile, the LPS maintained the TBP for foreign currency deposits at 2.00%. According to Doddy, market interest rates for foreign currency deposits have remained at a fairly high level recently.

He noted that rupiah deposit growth performance has been relatively high so far, but there is some potential for this growth to slow down. Conversely, foreign currency deposit growth is expected to increase under current conditions.

The third factor is banking liquidity conditions, which are said to remain well-maintained across all bank groups. However, Doddy stated there are indications of increasing interest rate competition among various bank groups.

Another factor is that the level of deposit insurance coverage is still above the legally mandated minimum of 90%. However, with the latest developments, there has been a slight downward trend that the LPS needs to anticipate to prevent it from continuing.

“Those are some of the factors we considered; of course, this determination is also based on a more complete analysis of the financial and banking system conditions,” said Doddy during a virtual press conference on the LPS TBP determination for the current period, Thursday (25/6/2026).