BI tighten requirements for property loans

JAKARTA. Bank Indonesia (BI) has tightened its loan-to-value (LTV) to financing-to-value (FTV) ratios for property loans.

LTV to FTV ratios are the ratios between loans or financing that a bank can provide compared to the value of the property, BI spokesman Difi Johansyah said in an official release on Wednesday.

The additional requirements are mandatory obligations for all banks providing loans for purchases of property, both commercial and residential.

 “This policy basically aims at maintaining the stability of the financial system and strengthening the banking industry through greater prudence,” Difi said.