BI Offers Incentives to Banks That Are Not 'Greedy' in Hoarding SRBI and SBN

Bank Indonesia (BI) Governor Perry Warjiyo has announced a new macroprudential liquidity policy (KLM) that will provide incentives to the banking sector. The new KLM offers an incentive in the form of a reduction in banks’ reserve requirements at BI, capped at a maximum of 2% of third-party funds (DPK), for banks that do not exceed the ownership limit for securities, including government securities (SBN) and Bank Indonesia Rupiah Securities (SRBI). Perry explained that this policy is expected to eliminate liquidity segmentation between banks, meaning that liquidity distribution from large banks to smaller ones can be achieved to boost financing. “Therefore, we hope that banks holding liquid instruments such as SRBI and SBN will increasingly repo them, either between banks or to BI,” Perry said during a press conference on Wednesday (22/7/2026). Perry stressed that the allocation of KLM to address liquidity segmentation in the money market and banking sector, while accelerating money market deepening, will take the form of a Money Market Deepening KLM (KLM PPU). The KLM PPU is intended to replace the KLM interest rate channel and financing to funding channel, and will come into effect on 1 September 2026. “Thus deepening our money market, improving monetary operations and then overcoming liquidity segmentation between banks and in the money market,” Perry stated. Perry said that technically, this KLM will be disbursed to banks whose ownership of SRBI and SBN does not exceed a ratio of 19%. “This is only given to banks that have SRBI and SBN, after deducting repos in the money market or to BI, which of course is below 19%,” Perry asserted. He confirmed that banks whose securities ownership ratio exceeds the 19% limit will not be able to receive the incentive. “If it is more than 19%, it means we do not provide the liquidity incentive. Therefore, a redistribution of liquidity between banks will occur,” he explained.