LPS Head Reveals Reasons for Persistently High Lending Rates
JAKARTA, KOMPAS.com - The Deposit Insurance Corporation (LPS) has spotlighted the low compliance of banks with the guarantee interest rate (TBP), thereby impeding the reduction in lending rates.
In January 2026, the LPS set the TBP for rupiah deposits in general banks at 3.5 per cent, for foreign currency (valas) deposits at 2 per cent, and for Rural Credit Banks (BPR) at 6 per cent.
LPS Commissioner Council Chairman Anggito Abimanyu stated that currently, around 33 per cent of banking deposits are above the TBP.
However, the January 2026 TBP position has remained unchanged since September 2025.
“This is quite high, meaning that banks have not yet complied with the guarantee interest rate that we have set,” he said during a working meeting with Commission XI in Jakarta on Thursday (9/4/2026).
LPS data even shows that the portion of banking deposits with interest rates above the TBP has continued to increase in recent years.
In December 2022, the portion was around 25 per cent, then rose to 30 per cent in December 2024, and increased again to 33 per cent in December 2025.
According to him, the high portion of deposits with interest rates above the TBP directly impacts the high cost of funds for banks, thus limiting the room for lending rate reductions.
“This is one of the reasons why lending rates cannot fall. Because 33 per cent of the deposit portion is considered above the guarantee interest rate. In other words, it is receiving a special rate,” he explained.
Furthermore, Anggito revealed a change in the pattern of TBP setting.
Previously, the TBP was generally above the market interest rate.
However, in 2025, the LPS set the TBP more aggressively, placing it below the market interest rate.
Yet, the TBP should reflect real conditions and serve as the primary benchmark in forming the banking interest rate structure.
“This is why for this January, we have conducted a slight evaluation and set the TBP the same as the previous conditions,” he stated.
In line with this, Bank Indonesia (BI) recorded that the transmission of the policy rate reduction to the banking lending rate reduction is still not optimal.
However, since 2025, BI has lowered the policy rate (BI rate) five times, from 6 per cent in December 2024 to 4.75 per cent in March 2026.
Yet, the lending rate in February 2026 was still at 8.80 per cent, or only down 40 basis points from 9.20 per cent in January 2025.
“Going forward, efforts to reduce banking deposit and lending rates still need to be continuously enhanced to drive higher credit growth in support of sustainable economic growth,” said BI Governor Perry Warjiyo during the BI RDG press conference in March 2026 on Tuesday.