OJK Responds to Himbara's Request to Extend SAL Placement Tenor

The Financial Services Authority (OJK) has responded to a request from the Association of State-Owned Banks (Himbara) to extend the placement tenor of funds from the Excess Budget Balance (SAL) by up to one year.

Speaking at the Senayan Parliament Complex in Jakarta on Wednesday, OJK Executive Head of Banking Supervision, Dian Ediana Rae, stated that the authority is open to further discussions with relevant stakeholders regarding the matter.

“Yes, this is still within the context of discussion; it is currently just a discussion. If the banking tenor is extended, we are actually quite welcoming of it; there is no problem,” said Dian.

“In fact, a longer tenor is actually better in the sense that credit expansion can become more extensive. The terms could potentially be longer,” he added.

However, Dian noted that this matter requires further dialogue with the Ministry of Finance and the Financial System Stability Committee (KSSK).

“But it will ultimately depend on our colleagues at the Ministry of Finance and, of course, the KSSK, which will conduct these discussions,” he said.

Furthermore, Dian assessed that Himbara’s request to extend the SAL fund placement tenor for one year would require a period of technical adjustment and transition. Regarding the risks associated with the request, he believed there were no significant dangers.

“From my perspective, the risk is not too large. What I see is the transition period, as I mentioned before. The issue is simply the period of adjustment, because banks manage public funds in total,” said Dian.

“Whether it is government money or public money, it is blended. Therefore, regarding withdrawals—when they are withdrawn and so on—if the amount is large, there certainly needs to be notification, so to speak,” he added.

Previously, Finance Minister Purbaya Yudhi Sadewa rejected Himbara’s request to extend the SAL fund placement tenor by one year. On Tuesday (7/7), Purbaya stated that the current scheme already provides adequate flexibility to meet banking liquidity needs. He noted that the current scheme also balances banking requirements with government cash reserves. There are concerns that extending the tenor could disrupt the government’s readiness to anticipate funding needs outside of the planned budget.