Banking - Bank Interest Rate Transparency Regulations to be issued soon

Banking - Bank Interest Rate Transparency Regulations to be issued soon The Financial Services Authority (OJK) is currently drafting regulations regarding the transparency of banking interest rates. The regulation is targeted to be completed before the end of the year. According to OJK the process is still in the rules making process and soon we will ask for opinions from related parties and ask for written responses. Worth noting that the policy regarding transparency of credit interest rates have previously been contained in POJK number 3 of 2019 and with the latest POJK will regulate the transparency and publication of basic credit interest rates for conventional commercial banks in accordance with the mandate of Law Number 4 of 2023 concerning Development and Strengthening the Financial Sector (UU PPSK). (Source : Kontan) Comment : We like the new policy as it will creates more transparency amidst the continuing stiffer competition. Yet, this could also limiting NIM expansion among banks as interest based benchmark will be ruled and more transparent. In all, we believe the policy will create more benefit than drawbacks, especially for credit transparancy to potential debtors.