Indonesia May Review Bank Deposit Guarantee, Nasution Says
Indonesia may gradually reduce the maximum deposit guarantee at banks as a global economic recovery reduces the risk lenders will fail, Bank Indonesia Governor Darmin Nasution said.
Now “is the right time” to review the guarantee amount because the financial crisis has passed, Nasution told participants at a banking seminar in Jakarta today.
Indonesia raised the maximum guarantee for deposits at banks in Southeast Asia’s biggest economy to 2 billion rupiah ($227,000) from 100 million rupiah on Oct. 13, 2008, as authorities from Europe to Asia tried to prevent the global financial crisis causing a run on their banks.
“We need to discuss with all banks, Bank Indonesia, parliament, and we need input from Lembaga Penjamin Simpanan,” Finance Minister Agus Martowardojo said at the same seminar, referring to Indonesia’s deposit insurance agency. He didn’t specify a timeframe for a possible change.
Lembaga Penjamin Simpanan Chief Executive Firdaus Djaelani, who also attended the seminar, proposed reducing the guarantee cap gradually, “for example, up to 500 million rupiah.”
The agency reduced the maximum deposit guarantee to 100 million rupiah from 1 billion rupiah on March 22, 2007. On Feb. 9 this year, it raised its maximum guaranteed interest rate on rupiah-denominated deposits to 7.25 percent from 7 percent and kept the maximum guaranteed interest rate on dollar- denominated deposits at 2.75 percent.
To contact the reporter on this story: Novrida Manurung in Jakarta at nmanurung@bloomberg.net
To contact the editor responsible for this story: Greg Ahlstrand at gahlstrand@bloomberg.net
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