Global Geopolitical Risks Loom, Banks Tighten Prudential Measures
Jakarta, VIVA – The national banking industry is strengthening its risk management framework and prudential banking principles amid rising global risks, triggered by the escalation of the Iran-Israel conflict involving the United States, which has the potential to pressure the stability of strategic commodity prices, particularly crude oil.
Perbanas Chairman who is also President Director of PT Bank Rakyat Indonesia (Persero) Tbk, Hery Gunardi, emphasised that although external volatility is increasing, domestic banking fundamental indicators remain at solid levels. This is reflected in sustained credit growth, adequate liquidity, and strong capitalisation.
“We see global risks increasing, particularly through the transmission of rising energy prices and financial market volatility. In this context, banking will further strengthen prudential principles through enhanced risk management and asset quality,” said Hery, quoted on Saturday, 28 March 2026.
Perbanas notes that several mitigation measures have been and continue to be strengthened by the banking industry in Indonesia. Some of these measures include sectoral stress tests and strengthening early warning systems to anticipate potential declines in credit quality. The sectoral stress tests are conducted on sectors sensitive to rising energy costs, such as transportation, logistics, and manufacturing.
In addition, Hery continued, banks are also increasing credit disbursement discipline through a risk-based pricing approach, maintaining liquidity adequacy through optimisation of the liquidity coverage ratio (LCR) and net stable funding ratio (NSFR), as well as managing foreign exchange exposure more conservatively through hedging strategies and control of net foreign exchange positions.
“These measures are important to ensure that the intermediation function continues to operate optimally without neglecting stability aspects, especially amid high global uncertainty,” he added. With this policy mix, the banking industry is expected to remain resilient and capable of supporting domestic economic growth, even though external pressures may increase in the short to medium term.