JAKARTA. The domestic economic will be stagnant if the local governments do not optimize the budget spending. In facts, the locals’ idle funds just piled up in the banks.
Data from the Ministry of Finance show that the locals’ funds stored in the bank by October 2016 amounted to Rp 206.85 trillion. This amount is slightly higher than September, which amounted to Rp 206.75 trillion.
As much as 58% of the funds are deposited in current accounts, while other 40% in deposit accounts. "About 60% -70% of the funds parked in regional development banks, and others in state-owned banks," said Head of Risk Economy and Financial System Group of the Deposit Insurance Agency Mohammed Dody Arifianto, Thursday (1/12)
About Rp 15 trillion-Rp 18 trillion of local government funds are deposited in Central Java Regional Development Bank (BPD Jateng). Business Director of Bank Jateng (Central Java Bank) Pujiono, as much as 60% of the funds parked in current account, while other 40% in deposit account.
The local government’s funds in BPD Jateng comprise 20%-30% of the total third party funds. “Usually, the local government savings will reach the highest level during July-October. The amount of savings will decline in December due to the funding for construction projects,” he said.
Bank Jateng provides a 4% and 6%-7% interests for current account and deposit account, respectively. In other words, the local government may gain Rp 360 billion-Rp 432 billion yields per year only from the current savings in Bank Jateng.
The local’s funds also piled up in Bank Jatim (East Java Bank). Without mentioning the value, Corporate Secretary of Bank Jatim Ferdian Satyagraha said as of October 2016, the local’s funds comprised 70% of total current account funds in the bank. In the same period, the total current savings in Bank Jatim amounted to Rp 16.83 trillion.
Corporate Secretary of PT Bank Rakyat Indonesia Tbk Hari Siaga added that the locals’ savings will decline at the end of the year, following the projects’ completion. Let alone, “The approved projects’ budgets cannot delay to the next year, except for the multi years project,” Hari said.
According to Dody, the banks have understood that the local governments prefer to park the funds in current account rather than deposit account. Therefore, the banks have prepared the mitigation if the locals withdraw the liquidity.
The banks also have to anticipate if the central government shifts the idled funds to the bonds. (Muhammad Farid/Translator)
