Every year, at least six to seven BPRs (rural banks) are liquidated, but this year, we recorded zero (bank liquidation), which means that our conditions are improving…Jakarta (ANTARA) - The Indonesia Deposit Insurance Corporation (LPS) has confirmed that it did not liquidate any banks in 2022, which indicates a progressing national economic recovery and a healthy banking sector.
"Every year, at least six to seven BPRs (rural banks) are liquidated, but this year, we recorded zero (bank liquidation), which means that our conditions are improving. It is only on BPR, it does not count BPDs (regional banks), neither public banks -- our conditions are significantly improving," Chief of the LPS' Board of Commissioners, Purbaya Yudhi Sadewa, said at a press conference on the IDIC International Seminar in Bali on Wednesday.
The LPS had projected that at least eight rural banks would be liquidated this year, and the improving national banking sector amid post-COVID-19 economic recovery has been causal to the non-materialization of this projection, he disclosed.
"Appropriate policies have been made by the KSSK (Financial System Stability Committee). The system policy is sufficient, and we also have our economy growing beyond the 5.7–percent mark," the LPS official noted.
Regarding the high loan at risk (LAR) recorded in several regions, such as Bali, which recorded 71 percent high risk loans out of the Rp8 trillion total loan value, he expressed the hope that the conditions will improve as the national economy begins to recover from the pandemic.
"Bali had its economy, particularly the tourism sector, almost wiped out (due to the COVID-19 pandemic), but Bali tourism has reopened for the last two months," Sadewa said.
Various international events on the island province, such as the G20 Summit, are expected to bolster its economic recovery, which could gradually lead to a decrease in the province’s LAR, he said.
"The LPS has not liquidated any bank in Bali. There were indeed some banks embroiled in issues, but those are older banks, while there are no such cases in newer banks," he added.
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Translator: Sanya Dinda S, Nabil Ihsan
Editor: Sri Haryati
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