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Jakarta (ANTARA News) - Credits grew at an average of 19.6 percent in the first semester this year compared to the same period last year.

Bank Indonesia director of research and banking regulations Wimboh Santoso said here on Friday the value of credits distributed by banks per June 2010 reached Rp140 trillion.

"Credits keep growing and are under normal conditions," he said.

Right now Bank Indonesia is still preparing a regulation linking reserve requirement (GWM) and Loan to Deposit Ratio (LDR) to push banks to extend loans.

The regulation will require banks to keep their LDR at 75 to 105 percent and those who fail to meet it will get a penalty and have to add more GWM contributions to Bank Indonesia.

"If a bank has a LDR of below 75 percent it will just increase its credits and if its third-party fund is large it may just lower its rate to let the funds to flow out," he said.

That way market mechanism will work and customers could choose banks that offer good interest to put their money, he said.(*)

Editor: Heru
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