Bank Indonesia Policy Mix
Adjustment of Macroprudential Intermediation Ratio (MIR)/Sharia
Macroprudential Intermediation Ratio (Sharia MIR)*
Bank Indonesia strengthens accommodative macroprudential policy through an adjustment to the Macroprudential Intermediation
Ratio by including the loan/financing received by banks as a component of funding in MIR/sharia MIR.
Policy Backgrounds
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In response to global and domestic
economic developments, BI is
maintaining an accommodative policy
mix to maintain the economic growth
while also maintaining macroeconomic
and financial system stability.
BI relaxed MIR/sharia MIR policy in
March 2019, which stimulated bank
lending. Nevertheless, the
macroprudential intermediation ratio
(MIR) is again approaching the upper
bound, thus necessitating efforts to
increase bank lending capacity.
Considering the potential of bank
funding sources that are not included in
the MIR ratio, for example the expanding
share of loans/financing received by
banks, Bl decides to adjust MIR/sharia
MIR policy in order to optimize
loans/financing received for bank
lending.
This policy to stimulate credit growth
will comply with prudential principles.
Therefore, Bl is only encouraging banks
with low non-performing loans and
adequate capital resilience to expand
credit/financing.
*This adjustment will be effective from December 2nd, 2019
Source: Bank Indonesia
Main Regulatory Points
Including loan received by conventional commercial banks and financing received by Islamic banks
and Islamic business units as a source of bank funding in the calculation of MIR/sharia MIR.
The criteria for loans/financing received by banks that are eligible to be included in MIR/sharia
MIR calculation are as follows:
a. Loans/financing received in Rupiah and foreign currency;
b. Loans/financing received in the form of bilateral loans and/or syndicated loans for
conventional commercial banks, Islamic banks and Islamic business units;
c. Loans/financing excludes interbank loans/financing.
d. Loans/financing received with a maturity of no less than 1 year; and
e. Loans/financing received based on a loan agreement.
Based on points a and b, the adjusted MIR/sharia MIR formula is as follows:
Credit + Owned Bond
Deposit + Issued Bond + Loan/Financing Received
Lower disincentive parameter
MIR/sharia MIR RR=
Lower Disincentives Parameter X (Lower Bound
MIR/Sharia MIR Target - Bank's MIR/Sharia MIR) x Deposit
NPL
≥ 5%
CAR
KPMM 14%
< 5%
14% KPMM ≤ 19%
KPMM 19%
Lower Disincentives Parameter
0.00
0.00
0.10
0.15
Upper disincentive parameter
MIR/sharia MIR RR=
-
of 0.2 x (Bank's MIR/sharia MIR Upper Bound of
MIR/Sharia MIR Target - ) x Deposit
*This disincentive applies for banks with CAR below
14%.
The reference rate used to calculate penalties for banks that do not meet MIR/sharia MIR policy
will be adjusted from the Jakarta Interbank Offered Rate (JIBOR) to the Indonesia Overnight Index
Average (IndONIA).
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