JAKARTA: Banks are looking for strategy to prevent dilution of profits in credit card business after Bank Indonesia restricted interest rate and late charge.
PT Bank Central Asia Tbk (BCA) Director Henry Koenaifi said central bank regulation tightening credit card business is not an obstacle for the future expansion plan.
"It's a good regulation since we believe such restriction will encourage banks to operate more efficiently," he said on Tuesday, June 12, 2012.
However, banks must seek a way to reduce operational cost and non-performing loan (NPL) so that restriction on interest rate does not affect the credit card business.
"All this time, such high rate is imposed to cover NPL and operational costs. If the high rate is stopped then we are looking for ways to lower operational costs and NPL," he added.
The central bank has issued a Circular Letter of Card Based Payment Instrument (APMK), regulating the maximum limit of credit card interest at 3% and late charge at IDR150,000.
BCA set the growth of credit card number by 20-25%, reaching 2.3 million to 2.4 million cards, "The card target is 20-25% or around 2.3 million to 2.4 million. There are currently 2 million cards. Thus, BCA becomes one of the banks having a portfolio of various segments," he said. (T06/aph)
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