New rule forces Indonesian banks to publish lending margins

Indonesia’s Financial Services Authority (OJK) will mandate banks to publish detailed breakdowns of their lending rates, including margins, starting in October, as part of a new regulation intended to increase competitiveness and boost lending growth. The regulation, introduced earlier this month, aims to ensure borrowers are not overcharged by encouraging more efficient interest rate setting by banks, which have been criticised by President Joko Widodo for maintaining high margins that could hinder business lending. As of June, the net interest margin for Indonesian banks stood at 4.57%, and banks that fail to comply with the new disclosure requirements could face fines of up to IDR15bn (USD970,000).