Governance Issues: LPS to Handle 7 Troubled Rural Banks in 2026

The Chairman of the Board of Commissioners of the Indonesia Deposit Insurance Corporation (LPS), Anggito Abimanyu, has confirmed the resilience of Indonesia’s financial sector amidst the uncertainties of 2026 during an Economic Update.

LPS, alongside the Financial System Stability Committee (KSSK), continues to drive mitigation and navigation efforts to maintain the stability of the Indonesian financial system. In 202ng, LPS is handling seven Rural Banks (BPR) whose business licences have been revoked due to issues regarding integrity and management governance. However, the banking ecosystem remains stable, characterised by sufficiently strong capitalisation, healthy banking intermediation, and double-digit growth in third-party funds (DPK) and credit.

Anggito also announced developments regarding the policy to increase the Deposit Guarantee Rate (TBP) by 25 basis points. For Rupiah deposits in commercial banks, the rate rises to 3.75%, while Rupiah deposits in Rural Banks (BPR) increase by 25 bps to 6.25%. Meanwhile, the rate for foreign currency deposits in commercial banks remains at 2.00%.

This TBP policy serves as a response to developments in the financial sector, where market interest rates have risen moderately, and banking performance remains robust, even as the guarantee coverage ratio has slightly declined from 93% to 92%.

Regarding relaxation policies for premium payments for banks affected by disasters in Sumatra, LPS is providing facilitation and ease of access to those impacted.

Reviewing current banking developments, LPS is optimistic that revenue targets for guarantee premiums and the Banking Restructuring Programme (PRP) premiums are progressing according to plan. LPS noted that as of April 2026, revenue reached IDR 14.5 trillion, representing more than half of the 2026 target.