Indonesian banks lag behind in ASEAN

A number of efficiency indicators reveal that Indonesia’s banks are still far behind in the ASEAN.

“We need to keep pace with Indonesia’s banking compared to competitors in ASEAN,” stated by Deputy Governor of Bank Indonesia, Hadad Hadad.


For example, from the net interest difference indicator, a national banking system is still 5.8 percent, while Singapore, Malaysia, Thailand, and Philippines have ranged from 2.3 to 4.5 percent.

Likewise if you look at the ratio of operating expenses to operating income, that is indicators that are used to assess the efficiency of banks. BOPO ratio of banks in Indonesia is still much higher, namely 81.6 per cent in 2009. While other ASEAN countries ranged from 32.7 to 73.1 per cent. To encourage the more efficient banks, said Hadad, Bank Indonesia will issue several policies. One of them is the obligation for banks to announce interest rate loans in March.


“This is to encourage competition for bank to drop lend rate and make them more efficient,” said Governor of Bank Indonesia, Darmin Nasution, who emphasizes that the efficiency of a knot of unravel intermediation problem complexity. If banks be efficient, it will encourage increased lending and economic growth.

“Efficiency is also encouraging banks to be more careful, selective, productive, and prospectively in lending,” he said.