"Do not compare them to those in 1997/1998 when they were weak," BI Governor Agus Martowardojo said.Jakarta (ANTARA News) - The condition of Indonesian banks is better that it was during the 1997/98 period and so is more resilient against economic upheavals caused by internal and external factors, Bank Indonesia governor said.
"Do not compare them to those in 1997/1998 when they were weak," Agus Martowardojo said here on Friday.
He said bank management in 1997/98 was not based on good governance in which quality of credits was poor, shareholders colluding with customers and management and others.
Such things have no longer happened now, he said.
"Our banks are respected in the world because of their health, capital adequacy ratio, low non-performing loans and liquidity," he said.
Per June 2013, the CAR of banks in the country was still very high standing at 18 percent which was far above the minimum standard of 8 percent while their gross non-performing loans was still low at 1.9 percent, he explained.
He said their liquidity also remained maintained although the loan to deposit ratio was high at 87.2 percent in June while credit growth slowed down from 21 percent in May to 20.6 percent in June following slower economic growth.
He said improvement had been made since the crisis in 1997/98 which was initially triggered by banking crisis and followed by economic crisis and social crisis.
Agus said he had conducted stress testing to assure that banks remained strong despite a change in exchange value and reference rate.
"Regulations on good governance have been carried out well and so we have been able to achieve current good conditions," he said.(*)
Editor: Heru Purwanto
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