Regional development banks face liquidity risks over proposed ASN payroll transfer

A proposed government plan to transfer the payroll of civil servants (ASN) from regional development banks (BPD) to state-owned banks (Himbara) has sparked significant opposition. The Federation of Regional Development Bank Workers' Unions (FSP BPD) has voiced concerns to the Indonesian House of Representatives (DPR RI), warning that the move could cause an economic disaster for regional areas by draining the low-cost liquidity that BPDs rely on to support local MSMEs and regional economic stability.

In response to these concerns, Doddy Zulverdi, a member of the Deposit Insurance Corporation (LPS) Board of Commissioners, noted that while the shift poses challenges to BPD liquidity, it could serve as a catalyst for these banks to become more competitive. Zulverdi suggested that BPDs should use this as an opportunity to diversify their customer base beyond civil servants and improve service quality to attract non-ASN funding. He emphasized that any such policy transition should not be implemented abruptly to allow regional banks sufficient time to adjust their business strategies and funding structures.