JAKARTA :Indonesia is looking at the possibility of moving government funds of between 5 trillion rupiah ($302.48 million) and 10 trillion rupiah to regional banks, its finance minister said on Tuesday.
Purbaya Yudhi Sadewa said the regional bank of Jakarta, as well as East Java’s Bank Pembangunan Daerah Jawa Timur, currently have the capacity to use the funds.
In September, the minister transferred 200 trillion rupiah kept at the central bank to several state banks, including Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia, Bank Tabungan Negara and Bank Syariah Indonesia.
The move was aimed at boosting economic growth, which has remained at around 5 per cent since the COVID-19 pandemic.
“We have offered the funds if they (regional banks) need them,” Purbaya told reporters.
“These funds can be used by the banks for loans to cooperatives and micro, small, and medium-sized enterprises,” he added.
Purbaya said the government was planning to inject liquidity into regional banks because the funds previously allocated to state banks were not being translated quickly enough into loans for businesses in the regions.
In Indonesia, regional banks are owned by provincial administrations while state banks are lenders in which the majority stake is held by the central government.
($1 = 16,530 rupiah)
