Customers choose to hoard funds in savings rather than deposits, what is the reason?

ILLUSTRATION. Saving book

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

KONTAN.CO.ID – JAKARTA. In the Covid-19 pandemic situation, the majority of customers are more comfortable hoarding most of their funds in cash to be more flexible. This can be seen from the rapid growth of savings funds in banks.

Referring to Bank Indonesia (BI) data, as of July 2020, total savings funds have reached IDR 2,001.3 trillion or an increase of 8.2% on an annual basis or year on year (yoy). This increase was higher when compared to placements in time deposits, which only grew by 5.5% yoy in the same period.

When broken down by customer category, the increase in savings was supported by individual funds which grew by 8.3% yoy and corporations that grew 8.2% yoy.

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Several bankers contacted by Kontan.co.id, confirmed that in an uncertain situation like now there are some customers who choose to move their funds from deposits to savings.

“It is true that many customers have moved their deposits to savings, with the aim of guarding against expenses due to current conditions,” said PT Bank BNI Syariah Corporate Secretary Bambang Sutrisno to Kontan.co.id, Monday (7/9).

When examined as of July 2020, total savings funds in BNI Syariah currently have reached IDR 21.97 trillion, an increase of 22.05% on an annual basis.

Meanwhile, total deposits in the range of Rp. 14.34 trillion were relatively stagnant from last year’s position, only up 0.43% yoy. However, according to Bambang, the shift in funds was not the only reason for savings to increase rapidly.

This is because in recent periods the banking industry, including the company, has indeed competed to develop customer service. Naturally, the higher the amount of savings, the bank’s low-cost fund ratio (CASA) will increase and has the potential to reduce interest expenses, aka margin.

“On the other hand, the Hasanah Online application (online savings opening) is in demand by customers,” he said.

Not to mention the series of collaborations the company has undertaken to encourage savings, such as the account opening project with BPJS and the Aceh Qanun.
As a result, because there were so many more savings accounts opened, deposit growth appeared to be slowing down.