OJK Reveals Increasing Mergers Among Rural Banks, Performance Shows Positive Growth

The Financial Services Authority (OJK) has revealed that as of April 2026, 57 Rural Banks (BPR) and Sharia Rural Banks (BPRS) have merged into 18 remaining entities. Furthermore, more than 200 BPRs and BPRSs are currently in the process of seeking merger or consolidation permits from the OJK.

OJK Executive Head of Banking Supervision, Dian Ediana Rae, stated that the regulator is continuously encouraging the resilience and contribution of the BPR and BPRS industry to the regional economy through policies regarding minimum core capital fulfilment and consolidation. This is intended to ensure the industry can withstand the challenges and demands of economic dynamics and competition within the banking sector.

Most BPRs and BPRSs have met the minimum core capital requirement of Rp6 billion. For those that have not, corporate actions such as additional paid-in capital or consolidation have been undertaken. Dian expressed hope that these steps would achieve the goal of strengthening the industry.

To further support the strengthening of regional banking roles, OJK is encouraging synergy between BPR/BPRSs and Regional Development Banks (BPD) through the consolidation of BPRs and BPRSs owned by local governments under the BPD umbrella.

In terms of performance, Dian noted that the BPR and BPRS industry continues to grow positively with healthy and maintained financial indicators. As of March 2026, total assets for BPR and BPRS grew by 3.70 per cent year-on-year (yoy) to Rp236.69 trillion. Credit/financing distribution grew by 2.83 per cent yoy to Rp176.96 trillion, supported by a 3.16 per cent yoy growth in Third-Party Funds (DPK) to Rp165.49 trillion.

This performance is also supported by relatively strong capital resilience, with an aggregate industry Capital Adequacy Ratio (CAR) of 27.20 per cent, significantly above regulatory requirements. Dian explained that the industry is working to strengthen risk mitigation through good management and governance in credit distribution, intensive post-disbursement monitoring, and the formation of loss reserves in accordance with applicable regulations.

Geographically and culturally, BPRs and BPRSs serve as financial institutions providing closer access to finance for MSME players, in line with the mandate of the P2SK Law. MSME credit distribution remains growing and stable, accounting for 50.07 per cent of total credit/financing as of March 2026.

While this composition is already high, credit distribution can be further increased through cooperation with other financial institutions and active participation in programmes such as the Regional Financial Access Acceleration Team (TPAKD), including anti-moneylender credit and agricultural sector credit.

Dian noted that global and regional economic dynamics pose challenges to the banking industry, alongside rapid technological advancements that change public expectations for financial services. BPRs and BPRSs face intensifying competition, particularly in the micro and small segments, which carries potential increases in credit risk.

To address these challenges and follow up on the mandate of Law Number 4 of 2023 regarding the Development and Strengthening of the Financial Sector (UU P2SK), OJK has issued the BPR and BPRS Industry Development and Strengthening Roadmap 2024-2027. This roadmap aims to transform BPRs and BPRSs into banks that are high-integrity, resilient, and contributory to MSMEs and local communities. The roadmap focuses on four pillars: Strengthening Structure and Competitiveness, Accelerating Digitalisation, Strengthening Regional Roles, and Strengthening Regulation, Licensing, and Supervision.