By: Gavin Asadit )*
The government continues to strengthen fiscal policy to support financial system stability and expand access to financing in the regions. One strategic step currently being implemented is the placement of a portion of state funds in regional banks. This measure was taken to increase local banking liquidity, accelerate credit distribution to productive sectors, and maintain the momentum of national economic growth to ensure it remains inclusive and equitable at the regional level.
The Ministry of Finance emphasized that the policy of placing government funds is not merely administrative but is part of a pro-growth fiscal strategy. The government believes that by strengthening regional banks, the flow of financing to micro, small, and medium enterprises (MSMEs) and regional development projects will be smoother.
Finance Minister Purbaya Yudhi Sadewa stated that the government is placing state funds in regional banks capable of disbursing productive credit. He emphasized that these funds are fully directed towards expanding access to financing for the real sector, particularly MSMEs, agriculture, trade, and regional infrastructure projects. Purbaya explained that this placement was carried out selectively and measurably so that every rupiah disbursed by the government had a direct impact on the community’s economic activity.
On a separate occasion, Purbaya emphasized that government funds should not be used for non-productive activities such as purchasing securities or speculative investments. He emphasized that the government wanted to ensure that recipient banks actually channeled funds to real sector credit and support job creation in the regions. The government, he continued, would withdraw funds that were not utilized according to regulations, as the main objective of this policy was to maintain banking liquidity to drive the economy, rather than accumulate them in financial assets that had no impact on the community.
The placement of government funds was carried out in the form of time deposits or call deposits, which provided flexibility in state cash management. This scheme allowed the Ministry of Finance to place funds for a specific period at a competitive interest rate, while also being able to withdraw funds when needed for other fiscal financing. This mechanism also provided room for regional banks to have additional liquidity without having to significantly increase their cost of funds.
Purbaya explained that the government had set strict criteria for recipient banks, including financial health, the loan-to-deposit ratio, and the bank’s ability to channel credit to the productive sector. He also explained that Bank DKI and Bank Jatim are two regional banks being considered as initial pilot projects for this program, given their stable and healthy credit capacity and performance. Purbaya stated that if the initial implementation goes well, the government will expand the fund placement program to more regional banks throughout Indonesia.
In terms of supervision, the government ensures that reporting mechanisms are carried out regularly. Each recipient bank is required to submit a monthly report on credit disbursement realization to the Ministry of Finance. This report will serve as the basis for evaluation to ensure that funds are truly distributed to the productive sector. The government is also coordinating with the Financial Services Authority (OJK) to ensure that oversight of program implementation is transparent and in accordance with good governance principles.
The Chief Executive of Banking Supervision at the OJK, Dian Ediana Rae, expressed support for this policy. She stated that the OJK supports the government’s move to place funds in regional banks as an effort to strengthen liquidity and support productive credit distribution. According to her, the OJK will ensure that each recipient bank maintains asset quality and implements prudent risk management to prevent an increase in the non-performing loan (NPL) ratio in the future.
Meanwhile, Minister of Home Affairs Tito Karnavian supports this policy as part of the synergy between the central and regional governments. Tito stated that the role of regional finance must be aligned with national fiscal policy to ensure a balanced economic cycle. He believes that when regional government spending is well-managed and the private sector is actively involved, national economic growth will increase significantly.
The government views the policy of placing funds in regional banks not only as a temporary solution to maintain liquidity, but also as a medium-term strategy to strengthen the national financial ecosystem. By expanding the reach of government funds to the regional level, it is hoped that this will create an equitable distribution of financing flows and accelerate local economic growth.
Through this policy,The government aims for regional banks to play a greater role in driving national economic growth. With stronger liquidity, regional banks are expected to increase financing for productive projects, support regional economic independence, and strengthen the stability of the overall financial system.
Overall, the placement of government funds in regional banks reflects the government’s efforts to maintain a balance between fiscal and monetary policies to support inclusive growth. The government emphasizes that all these policies are transparently monitored, cross-agency supervised, and directed towards providing direct benefits to communities throughout Indonesia.
)* The author is an observer of social and community issues
