Impact of SAL Fund Placement on Banks Varies, OJK Explains

The Financial Services Authority (OJK) has assessed that the government’s re-placement of excess budget funds (SAL) into state-owned banks (Himbara) supports banking liquidity, thereby creating healthier and more measured competition for funds and interest rates. However, OJK’s Chief Executive of Banking Supervision, Dian Ediana Rae, noted that the cost of funds will be influenced by various factors, including each bank’s funding strategy, market interest rate structures, and the maturity profile of liabilities and overall liquidity conditions. “Therefore, the impact of SAL fund placement on each bank’s cost of funds will certainly differ according to their characteristics,” he said during a press conference in Jakarta, quoted on Wednesday, 8 July 2026. In general, the OJK views the policy of re-placing a portion of the government’s SAL funds as helpful for bank funding, particularly in meeting or anticipating short-term liquidity needs. Furthermore, the additional source of funds strengthens banks’ ability to carry out their intermediation function and encourages a reduction in the cost of funds in line with their capabilities and fund management strategies. “With adequate sources of funds, banks certainly have greater room to channel credit to sectors in need and, most importantly, can have a direct impact on the national economy,” Dian said. From an industry perspective, Dian stated that the impact on banks outside the recipients of the fund placement will depend on market dynamics and overall liquidity conditions. If industry liquidity becomes more adequate, pressure on fund accumulation could potentially become more manageable, thus creating healthier competition. However, Dian added that the magnitude of the impact on each bank is still influenced by their respective funding structures, liquidity profiles, and differing business strategies. Regarding the utilisation of this additional liquidity, the OJK is in principle not in a position to direct the banks’ fund distribution. “Because that is part of each bank’s business strategy, their business judgement, while all banks are still expected to observe risk management principles and applicable regulations,” Dian said.