Impact of Providing Deposit Interest Exceeding LPS Provisions

When a customer has several bank savings accounts, the total of all these accounts is considered as a calculation of the guaranteed money. Guaranteed deposits include the principal amount plus interest for conventional banks or the principal amount plus profit sharing for Islamic banks.
The Deposit Insurance Corporation (LPS) announced the determination of the deposit guarantee interest rate as of February 2023. Based on the LPS Board of Commissioners meeting, an increase in the deposit guarantee interest rate in rupiah at commercial banks and rural banks (BPR) was determined. The guarantee interest rates for commercial banks, foreign currencies (foreign currencies), and Rural Banks (BPR) are 4.25%, 2.25%, and 6.75℅ respectively, then customers will not receive interest exceeding the reasonable interest rate set by the Deposit Insurance Corporation (LPS). The excess interest is not guaranteed by LPS.

Article 19 paragraph (1) of Law Number 24 of 2004 concerning the Deposit Insurance Corporation stipulates that guarantee claims will be declared ineligible for payment under several conditions, namely 1) If the customer's deposit data is not recorded at the bank, 2) The depositing customer is an unfairly benefited party, and 3) The depositing customer is a party that causes the bank's condition to be unhealthy. Letter (b) of Article 19 paragraph (1) relates to the condition of several banks that provide deposit interest exceeding the LPS limit.

These requirements can generally be said to be the 3T payable deposit criteria, namely 1) Recorded in the bank's books, 2) The deposit interest rate does not exceed the LPS provisions, and 3) Does not take actions that are detrimental to the bank. These three criteria are obligations that must be fulfilled by customers to make deposit guarantee claims when the bank where the deposits are stored has been liquidated. LPS was formed with the aim of guaranteeing customer deposits when the bank where they are stored has failed in its business by making guarantee claims on Banking customer deposits. However, when the deposit interest applied in the bank exceeds the provisions of the LPS policy, the customer's deposits will not be guaranteed by the Deposit Insurance Corporation.

Digital Banking Responsibility

Digital Banking has responsibilities, namely:

  1. Fund Security, which is maintaining the security of customer deposits. This includes protecting against data breaches, cyber fraud and illegal access.
  2. Information Confidentiality which maintains the confidentiality of customer data and personal information.
  3. Customer Service which provides responsive and helpful customer service, both through digital platforms and other channels.
  4. Transparency which provides clear and transparent information about financial products and services, including interest rates, fees and risks.
  5. Regulatory Compliance which complies with applicable regulations and laws in the field of digital finance.
  6. Paying Interest Rates according to Agreement which pays deposit interest rates in accordance with what has been agreed with customers.
  7. Explaining Risks which explains the risks associated with high interest rate deposit products, including LPS (Deposit Insurance Corporation) protection.

References

  • Law Number 24 of 2004 concerning the Deposit Insurance Corporation
  • Regulation of the Financial Services Authority of the Republic of Indonesia Number 12/POJK.03/2021 concerning Commercial Banks PENG-7/DSPS of 2023 Concerning Stipulation of Guarantee Interest Rates for Deposits in Commercial Banks
  • Fuady, Munir. Modern Banking Law, Bandung: Citra Aditya Bakti, 2003