Regional Government Funds in Indonesian Banks Reach Rp203 Trillion

Background of Idle Funds

Minister of Home Affairs Tito Karnavian reported to President Prabowo Subianto that regional government funds amounting to Rp203 trillion remain idle in bank accounts. This substantial amount is attributed to several factors, primarily the recent appointment of new regional heads in February 2025, who are still in the process of forming their administrative teams.

Reasons for Delayed Fund Utilization

1. Administrative restructuring: Newly appointed regional heads are still organizing their cabinets, including heads of departments and secretary generals.
2. Year-end contract payments: Regions are preparing budgets for payments related to projects completed at the end of the year.
3. January budget preparations: Local governments are also allocating funds for salaries and operational costs for the following month.

Implications of Idle Funds

The significant amount of idle funds suggests potential inefficiencies in regional financial management. While some delays are attributed to the transition period following the appointment of new regional leaders, the overall impact on regional development projects and economic activity warrants further examination.