BI Reports Banks Begin Aggressive Loan Distribution, Lending Rates Continue to Fall

Jakarta — The banking sector in Indonesia is now beginning to aggressively distribute loans, in line with lending rates that have gradually declined in response to the BI’s interest rate cuts since September 2024.

Destry Damayanti, Deputy Senior Governor of Bank Indonesia, stated that lending rates for new loans have fallen by as much as 88 basis points. This level, she said, indicates that banks are beginning to prepare for massive loan disbursement.

“The rate has fallen by 88 basis points. This means banks are already beginning to prepare, in fact, their lending appetite has started to increase,” Destry said during the launch of the Financial Stability Review Study No. 46 in Jakarta on Friday (27 February 2026).

Destry noted that the banking sector’s capacity to increase loan distribution remains very large, as liquidity in the financial system remains adequate.

“The industry is in fairly good health. Looking at the banking system’s liquid asset ratio, it currently stands at 27.6%. Additionally, our capital adequacy ratio is 25.9%, which is far above the 8% threshold,” Destry stated firmly.

With adequate liquidity in the banking system, BI, according to Destry, maintains stability through macroprudential liquidity policy incentives (KLM). These incentives have been distributed to various banks totalling Rp427.5 trillion to date.

“Of the Rp427.5 trillion, approximately Rp357.9 trillion has been channelled through the lending facility incentive, whilst Rp69.6 trillion went through the interest channel. The interest channel was only introduced about two to three months ago. This demonstrates the timing is right, as banks have begun reducing lending rates over the past two months,” Destry explained.

Nevertheless, Destry acknowledged that banks need to accelerate the pace of lending rate reductions further, given that the BI Rate benchmark has fallen by 150 basis points.

On the other hand, banks’ lending capacity also needs to be enhanced, as demand remains insufficient. This is evident from the undisbursed loan facilities of the banking sector, which still amount to Rp2.506 trillion or 22.65% of available credit facilities.

“This is quite a substantial figure. This is what we need to encourage so that it will become a source for economic growth,” Destry stated.