Indonesia's Financial Regulators Crack Down on Special Interest Rates for Large Depositors

Growing Concern Over Special Rates

The Financial System Stability Committee (KSSK) has taken a firm stance against the practice of large depositors demanding special interest rates from banks. This move comes as the proportion of deposits receiving these preferential rates has grown substantially, reaching 27% of total third-party funds (DPK) by October 2025 according to Bank Indonesia (BI).

Impact on Banking Sector

The increasing prevalence of special rates has been identified as a key factor slowing down the transmission of lower benchmark interest rates to credit rates. Despite the central bank's efforts to stimulate economic growth through monetary easing, the persistence of high special rates has limited the effectiveness of these measures. The KSSK's recent urging aims to address this imbalance and ensure more effective monetary policy transmission.

Regulatory Perspective

The KSSK's decision reflects growing regulatory concern about the impact of special rates on the banking system's overall health and monetary policy effectiveness. By discouraging excessively high special rates, regulators hope to create a more balanced banking environment that supports both depositors and borrowers.

Market Implications

The move is expected to have significant implications for both banks and large depositors. Banks may gain more flexibility in managing their liquidity and interest rate margins, while large depositors may need to adjust their expectations regarding returns on their deposits. The development underscores the ongoing challenges in Indonesia's financial sector as it navigates monetary policy transmission and banking stability.