Banks install high deposit rates, apparently this is the reason

Reporter: Lawrence Marshall Sautlan Sitanggang | Editor: Herlina Kartika Dewi

KONTAN.CO.ID – JAKARTA. The economic slowdown due to the Covid-19 pandemic has made banks more vigilant in maintaining liquidity. Because, it is not impossible in the trend of restructuring and weakening of the economy, liquidity risk is getting higher.

As a result, several banks began actively offering high deposits to maintain liquidity. Referring to Bank Indonesia’s Money Market Information Center (PIPU) data as of July 10, 2020, the highest average time deposits for 1, 3, 6 and 12 month tenors is quite high. Among others, 9.5% for tenors of 1 and 3 months, then 8.75% for 6 months and 9% for 12 months.

The highest bid for 1-month tenor in this period is at Mega Bank, which is 7%, then Commonwealth Bank and Mayora Bank and Mandiri Bank at 6%. The offer of deposit interest is relatively not very much moving month on month (mom) or even declined around 25 bps for Bank Mayora and Bank Mandiri.

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Some bankers contacted by Kontan.co.id said that so far, liquidity was still very sufficient. Meanwhile, the amount of interest is a liquidity management strategy as well as following the movement of deposit interest rates in the market.

Bank Mandiri Corporate Secretary Rully Setiawan explained the company’s liquidity ratio alias loan to funding ratio (LFR) and Macroprudential Intermediation Ratio (RIM) are still very prudent, namely at the safe limit of 85%.

“Bank Mandiri’s liquidity position is currently in a safe condition where all liquidity ratios are maintained within limits according to regulations,” said Rully, Sunday (12/7).

Rully explained, the ratio indicated that there were sufficient liquid assets to meet liquidity needs. Despite the economic crisis due to the corona virus outbreak, the bank bearing the gold ribbon guarantees that liquidity will still be stable. “Bank Mandiri always maintains a safe level of liquidity in order to meet the maturity obligations and operational needs of the bank,” he said.

For additional information, referring to the May 2020 report the total deposits of Bank Mandiri (bank only) have reached Rp 287.85 trillion. The realization increased quite high at 14.91% year on year (yoy).

In line with Bank Mandiri, Bank CIMB Niaga Consumer Director Lani Darmawan also said that the company’s current deposit interest rate was set in accordance with the average interest on the banking market. For information, referring to the PIPU data as of July 10, 2020, the highest interest rate of CIMB Niaga for 1 and 3 month tenors is set at 5.35%. As for the highest interest rates of 6 and 12-month tenors, they are stable at 5.5%.