REPUBLIKA.CO.ID, JAKARTA - A leading banker said liquidity and non performing loan would remain big challenges to be faced by Indonesian banking industry in 2014. 

President of PT Bank Jabar Banten (BJB) Tbk Bien Subiantoro said in Bali on weekend there were withdrawals of large funds from banks leaving banks to face liquidity problem in 2014. The owners of the funds used the money to invest in state bonds (SUN), Subiantoro said. 

"Based on our estimate, a number of banks would see declining third party funds," he predicted. 

Meanwhile, NPL especially in the commercial and corporation sectors is feared to shadow the banking industry next year. 

"Many medium commercial and corporate borrowers with credits ranging from 5 billion to 100 billion IDR are still aggressive," Subiantoro said.

Their expansion ambition was not proportional with their debt repaying capacity, he said. Subiantoro added that currently BJB's commercial NPL is 6.6 percent or down from 14 percent last year. 

Earlier, Bank Indonesia's Governor Agus Martowardojo said high lending rates put by banks would slow down credit expansion to 15-17 percent in 2014 while normally the growth reached more than 20 percent.

Subiantoro said that economic growth normally was one fourth of credit growth. Earlier, the World Bank predicted the country's economic growth at 5 percent in 2014. 

He expects the government to concern more on maintaining the economic stability until 2014, the reason for the call to cut credit expansion. He believes the government will seek to place the countrys current account deficit at a sustainable level.

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