Bank Jakarta and Bank Jatim on the Role of Regional Development Banks as Community Banks

President Director of Bank Jakarta and Chairman of ASBANDA, Agus Haryoto Widodo, stated that collaboration among BPDs through Joint Business Groups (KUB) is highly relevant for regional banks. In addition to strengthening capital, KUB is also expected to help accelerate business expansion and efficiency in building digital services as well as strengthening human resources.

Nevertheless, there are challenges related to differing visions and interests among BPDs, readiness of capital and technology, and lingering concerns about the loss of BPD identity.

Meanwhile, President Director of Bank Jatim, Winardi Legowo, mentioned that the key factors for banking success are capital, governance, systems, technology, and human resources, so the success of a BPD KUB is not solely determined by achieving capital of Rp 3 trillion.

For the KUB process to succeed, Bank Jatim stressed the importance of agreement on the vision and mission of KUB members, and the benefits of KUB must be ensured to be mutually advantageous for each member through business ecosystem synergies.

Regarding the strengthening of cooperation between BPDs and rural banks (BPR) through community banks, BJTM sees challenges related to the synchronisation of business targets that are not yet aligned and incur costs. To overcome this issue, BPRs and BPDs can share market segments in credit distribution as well as synergise on digitalisation services.

Bank Jakarta sees the potential for BPD and BPR cooperation as quite good, but it must be placed within the right structure. BPDs have better resources while BPRs have access to services in the micro segment, so they can be synergised in forms such as linked programmes that do not transfer risk from one party to another.