The Financial Service Authority (OJK) will issue a new regulation regarding the incentives awarded to banks for improving their cost efficiency by lowering net interest margin (NIM). The OJK has demanded state-owned banks to lower their NIM to the range of 3-4% in a bid to push the country’s lending rates down, hence boosting credit growth and economic activity. Compared to its regional peers, Indonesia’s NIM is high, currently at an average of 5.39%. The incentives would be among others the simplicity of opening branches (regulated) and incentives for training and education program (non-regulated).To subscribe please click here