2022 State Budget: Fiscal Policy and Structural Reform
Relaxing the Loan-to-Value (LTV) and Financing-to-Value (FTV) Ratios*
Prudential aspects of Relaxing the Loan-to-value (LTV) and Financing-to-Value (FTV) Ratios
1.
The requirements of the LTV ratio for property credit and FTV ratio for property financing are as follows:
i.
The net ratio of NPL to total credit or NPF to total financing must not exceed 5%; and
ii.
The gross ratio of property NPL to total property credit or property NPF to total financing must not exceed 5%.
2.
Banks must make sure that there is no loan transfer to another borrower at the same bank or different bank for tenors of less
than 1 year. The requirements are valid for banks that will disburse pre-order property loan/financing.
3.
Banks are required to comply with prudential principles when disbursing loans.
4.
Gradual loan liquidation is only allowed for developers that comply with bank's risk management policy (e.g. the business
feasibility of the developer).
5.
Banks are required to ensure that transactions to disburse loans (including down payment) and gradual liquidation must be
processed through the debtor and developer/seller's bank account.
LTV/ FTV Exemptions
Central government or local government loan / financing programs are exempt from this regulation.
*As part of further relaxation on macroprudential policy, an adjustment will be applied starting from December 2nd, 2019
Source: Bank Indonesia
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