Banks Grapple with Coronavirus in Maintaining Credit Growth

The Financial Services Authority (OJK) provided another stimulus to the market to minimize the impact of the Covid-19 outbreak on the economy, particularly in the banking industry. Having easing the minimum statutory reserve requirement (GWM) for foreign exchange and rupiah, the financial watchdog eased the credit quality.

There are two critical points in credit quality easing. The credit quality assessment of up to Rp 10 billion will be only based on one pillar, namely the accuracy of principal and interest payments. It applies to loans that have been channeled to debtors in sectors affected by the coronavirus spread, or industries given incentives by the government. The easing also applies to credit restructuring directed to debtors in the industry affected by Covid-19, which is valid for a year from the date of stipulation and can be extended if necessary.