Banks Unanimously Offer Special Rates, LPS Reveals the Cause

The Indonesia Deposit Insurance Corporation (LPS) has decided to increase the deposit guarantee interest rate (TBP) for rupiah deposits at commercial banks and rural banks (BPR) to 3.75% and 6.25%, respectively.

Member of the LPS Board of Commissioners for the Deposit Guarantee and Bank Resolution Programme, Doddy Zulverdi, revealed that this decision was based on several factors, one of which is the tendency for deposit interest rates to continue rising across all bank groups. He explained that this condition is a consequence of the benchmark interest rate policy and the prices of financial instruments.

LPS assessments show that the market interest rate (SBP) for rupiah deposits in the banking sector exhibited an upward trend across all bank groups. Doddy detailed that during the observation period in June, the rupiah SBP rose by an average of 14 basis points since the beginning of the year to an average level of 3.28%.

‘This upward trend is in line with the increase in the policy interest rate, the rise in yields on domestic financial instruments, and also competition among banks,’ Doddy explained during a virtual press conference on the periodic determination of the TBP on Thursday (25/6/2026).

He stated that the increase in the SBP is inseparable from the rise in the provision of special rates by banks.

Doddy elaborated that as of May 2026, the portion of deposits earning interest above the TBP increased to 33.82%. A month earlier, deposits with interest rates above the TBP reached 32.92%.

‘And this occurred across all banks. So, there is no bank that did not experience an increase in its special rate,’ Doddy said.

He continued that the increase in the provision of special rates at banks is a reflection or implication of the development of the policy interest rate, conditions in the financial market, and, of course, competition among banks.