Bank - Outstanding COVID-19 restructuring in banks around IDR207.4 tn

Bank - Outstanding COVID-19 restructuring in banks around IDR207.4 tn President Joko Widodo proposed that the relaxation policy for credit restructuring affected by COVID-19 be extended again until 2025. This was conveyed by the Coordinating Minister for Economic Affairs, Airlangga Hartarto. The extension was proposed to reduce the burden on banks in providing for losses resulting from non-payment of people's business credit (KUR). "The President's direction is that credit restructuring due to COVID-19 be proposed to the OJK later via KSSK and the Governor of BI to be continued until 2025," said Airlangga at the Presidential Palace Complex in Jakarta on Monday (24/6). With the end of this relaxation, credits that have not been paid smoothly will no longer be categorized as current as when the policy was in effect. However, it will be categorized as a non-performing loan (NPL). If it is in current status, the bank does not need to make reserves for these credits. But once an NPL or credit becomes part of normal restructuring, the bank must create a reserve for impairment losses (CKPN). These reserves will then burden the bank's finances. (Source: Kontan). Comment : The total outstanding of Covid restructing has been declining sharly since the recovery momentum take place. Post the fully lifted of the relaxation policy, the remaining outstanding now has to be beter provisioned. With the proposed of new policy will become as a strong catalyst for bank, in our view.