Looking Forward to Healthy Banking Expansion

She also reminded that banks should remain healthy so that there should be no liquidity problems. ‘’If the banks remain healthy and expand their credits or loan provision by more that 15 percent then Indonesia’s economy in 2010 will certainly be better,’’ she said in December 2009.

She also added that everyone involved in the banking industry should keep on learning how to maintain the healthiness of banks and to manage them well so that problems do not occur in the future.

Of course a prudent management of banks is the key to avoiding cases like Bank Century. BI has created a blueprint for the development of a healthy banking system, which is called Indonesia’s Banking Architecture (API).

This provides direction and guidelines for the banking industry to progress over a period of five to 10 years in the future. The policies formulated in the API are intended to create a solid, healthy and efficient banking system for a stable financial system to support national economic growth.

API, launched on Jan. 9, 2004 as a follow-up to the bank restructuring program launched in 1998, is part of the government and BI efforts to rebuild the country’s economy after being devastated by the 1997/1998 Asian economic crisis.

BI keeps perfecting the programs set in the API in an effort to establish a stronger foundation for the country’s banking system and in view of new developments at home and in the global economy.

BI wants the API to also incorporate specific strategies to develop sharia banking, People’s Credit Bank (BPR) and small and medium enterprises.

“The API is expected to include more complete and comprehensive programs that cover general banks as well as BPR, both conventional or sharia, and the development of small and medium enterprises,” said Muliaman. (Burhan Abe)

The Jakarta Post, January 19, 2010

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