JAKARTA - Indonesia Financial Services Authority (OJK) continues to monitor the development of the banking system in the face of turmoil Homeland depreciation (rate) of the rupiah against the US dollar.
Nelson Tampubolon, the Board of Commissioners Banking OJK said it had a meeting with the 16 banks to ask for assurance of their financial condition.
Nelson said, banks represented 16 banks claimed depreciation not affect the bank's financial business because the net open position (NOP) of banks is relatively low, ie, as of January amounted to 1.68% of the limit of 20% NOP. However, the OJK still ask banks to continue to monitor the development of the exchange rate.
"Each bank agreed to care should be taken that this slowdown continues," said Nelson, Friday, March 13.
OJK had previously conducted a test of endurance or bank stress test to shocks depreciation. The worst results, there are five banks that will erode the capital adequacy ratio or capital adequacy (CAR) them if the rupee weakened to $ 15,000 per US dollar.
Irwan Lubis, Deputy Commissioner Division of Banking Supervision OJK, Irwan Lubis explained, banks with capital risk profile at the level of 12% -13%, potentially affected if the depreciation of the rupiah at Rp 15,000 per US dollar.
Even so, he said, banks will be affected only small banks.
Capital ratio smaller banks are affected as a result of the second round effect. Second round effect, caused by the impact of the depreciation of the rupiah which makes an impact on the increase in the ratio of non-performing loans and non-performing loan (NPL) banks. It can override CAR although not practicing as a foreign exchange bank.
Irwan detailing, there are two typical banking risks that could befall on weakening rupiah if touched the figure of USD 15,000. The first is the risk of a first round effect through market risk. That is, if the banks have a large exposure to foreign currency short-term nature, the banking income statement can be affected due to the weakening rupiah up to Rp 15,000.
Second, is the risk of second round effect is through the NPL. This can happen to banks that extend credit to borrowers whose business contact with components imported or also the use of currency. Well, if the condition of the debtor disrupted due to the exchange rate depreciated, it could result in loan repayments.
"As a result, the formation of loss reserves in the banking system, which means the greater the effect on profit and loss of banking, then the impact on capital. It will be exposed to the risk profile of the bank," said Irwan.
Roy A. Arfandy, Director of PermataBank said, weakening the exchange rate does affect the bank's business as foreign currency lending. However, the bank would have to be anticipated from the beginning as not give foreign currency loans to entrepreneurs who earn dollars, because it would be very risky.
"If you want to give foreign currency loans, the need to ensure that the debtor's income is in foreign currency," he said.
Nelson Tampubolon, the Board of Commissioners Banking OJK said it had a meeting with the 16 banks to ask for assurance of their financial condition.
Nelson said, banks represented 16 banks claimed depreciation not affect the bank's financial business because the net open position (NOP) of banks is relatively low, ie, as of January amounted to 1.68% of the limit of 20% NOP. However, the OJK still ask banks to continue to monitor the development of the exchange rate.
"Each bank agreed to care should be taken that this slowdown continues," said Nelson, Friday, March 13.
OJK had previously conducted a test of endurance or bank stress test to shocks depreciation. The worst results, there are five banks that will erode the capital adequacy ratio or capital adequacy (CAR) them if the rupee weakened to $ 15,000 per US dollar.
Irwan Lubis, Deputy Commissioner Division of Banking Supervision OJK, Irwan Lubis explained, banks with capital risk profile at the level of 12% -13%, potentially affected if the depreciation of the rupiah at Rp 15,000 per US dollar.
Even so, he said, banks will be affected only small banks.
Capital ratio smaller banks are affected as a result of the second round effect. Second round effect, caused by the impact of the depreciation of the rupiah which makes an impact on the increase in the ratio of non-performing loans and non-performing loan (NPL) banks. It can override CAR although not practicing as a foreign exchange bank.
Irwan detailing, there are two typical banking risks that could befall on weakening rupiah if touched the figure of USD 15,000. The first is the risk of a first round effect through market risk. That is, if the banks have a large exposure to foreign currency short-term nature, the banking income statement can be affected due to the weakening rupiah up to Rp 15,000.
Second, is the risk of second round effect is through the NPL. This can happen to banks that extend credit to borrowers whose business contact with components imported or also the use of currency. Well, if the condition of the debtor disrupted due to the exchange rate depreciated, it could result in loan repayments.
"As a result, the formation of loss reserves in the banking system, which means the greater the effect on profit and loss of banking, then the impact on capital. It will be exposed to the risk profile of the bank," said Irwan.
Roy A. Arfandy, Director of PermataBank said, weakening the exchange rate does affect the bank's business as foreign currency lending. However, the bank would have to be anticipated from the beginning as not give foreign currency loans to entrepreneurs who earn dollars, because it would be very risky.
"If you want to give foreign currency loans, the need to ensure that the debtor's income is in foreign currency," he said.
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