NewzThe Financial Services Authority (OJK) of Indonesia has issued a directive urging banking institutions to carefully assess credit risks when implementing rapid interest rate hikes. The regulator emphasizes that banks must balance their monetary adjustments with a thorough evaluation of the repayment capacity of their debtors.
This guidance aims to ensure financial stability by preventing a surge in non-performing loans during periods of tightening monetary policy. By prioritizing the assessment of borrower financial health, the OJK seeks to mitigate potential systemic risks that could arise if interest rate increases outpace the ability of customers to meet their debt obligations.
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