Bank Indonesia's SRBI Creates Twofold Pressure on Banking Sector

The Chairman of the Indonesian National Banks Association (Perbanas), Hery Gunardi, has assessed that the attractiveness of Bank Indonesia’s Rupiah Securities (SRBI) instrument is creating two pressures for the banking sector. Firstly, it is tightening competition for fundraising, and secondly, it is absorbing liquidity, which has the potential to reduce intermediation capacity. He explained that the increasing attractiveness of SRBI is intensifying competition for fundraising, thereby driving adjustments in deposit pricing. This condition is causing liquidity in the market to tighten further. “The increase in the outstanding yield and volume of SRBI is amplifying liquidity pressures and tightening competition for rupiah fundraising,” said Hery, who is also the President Director of BRI, at the Mid Year Economic Outlook 2026 event in Jakarta, Friday, 26 June 2026. Based on data from Bank Indonesia (BI), the total outstanding SRBI as of the end of May 2026 reached Rp 979.88 trillion, a significant increase from Rp 730.90 trillion at the end of December 2025. Of this total, bank ownership reached Rp 677.89 trillion, while non-bank ownership amounted to Rp 260.44 trillion, consisting of residents at Rp 43.95 trillion and non-residents at Rp 216.48 trillion. “This significant growth in outstanding SRBI shows that the instrument is increasingly becoming a competitive placement of funds, both for banks and non-bank investors,” Hery noted. Bank Indonesia has been strengthening SRBI yields across all tenors in line with a 100 basis points (bps) increase in the BI-Rate during May-June 2026. The central bank took this step to attract foreign portfolio investment inflows into domestic financial assets, thereby helping to strengthen the rupiah exchange rate. Based on the money market yield curve publication, the volume-weighted average yield of SRBI in the secondary market across all tenors tended to increase on Friday, 19 June. Specifically, the 1-month SRBI tenor was recorded at 6.95 percent, the 3-month at 7.24 percent, and the 12-month at 7.67 percent. Along with the 100 bps increase in the BI-Rate, Hery noted that this condition will structurally increase the pressure on the repricing of third-party funds (DPK). The recent rise in deposit rates is also expected to put pressure on the banking industry’s net interest margin (NIM). “This means that for banks, the cost of funds will have a tendency to rise. If the cost of funds or cost of capital increases, then in conditions like this, discipline becomes the keyword. We are now entering an era of selective growth,” Hery said. Although the banking industry is generally still considered solid, Hery assessed that a number of pressures are beginning to emerge. DPK growth is starting to slow, NIM is compressed, and the capital adequacy ratio (CAR) has slightly decreased compared to the previous month. Amid tightening liquidity, he also stressed the importance of disciplined asset and liability management and consistently building low-cost funds in the form of savings and current accounts. According to Hery, these two things are a foundation that banks must not ignore. Hery added that banks also need to implement a more selective and productive credit distribution strategy by prioritising productive sectors. This should be done while maintaining the precautionary principle, setting a sectoral risk appetite appropriate to the current macroeconomic conditions, and building a quality credit pipeline through a more comprehensive ecosystem approach. Hery also emphasised the importance of proactive asset quality management through a strict underwriting process, a more granular early warning system, and collection readiness if collectability quality begins to decline. Furthermore, the acceleration of digital transformation and the utilisation of data analytics are no longer considered just a medium-term strategy but have become a business necessity for the banking industry today. Banking industry credit in May 2026 grew by 11.51 percent year-on-year (yoy), higher than the 9.98 percent (yoy) recorded in April 2026. Meanwhile, third-party funds (DPK) grew by 13.47 percent (yoy), and the ratio of liquid assets to DPK (AL/DPK) stood at 24.74 percent.