Based on data from Indonesia's central bank (Bank Indonesia), the country's NPL ratio reached 3.1 percent in January 2017 up from 2.93 percent in December 2016 or 2.49 percent in December 2015. Ahead, Indonesia's accelerating economic growth as well as Bank Indonesia's lower interest rate environment is expected to result in rising credit demand from individuals and corporations. This could also translate into a slightly higher NPL ratio, although rising income amid economic acceleration also makes it easier for companies to meet their debt obligations to banks (these companies had difficulty meeting obligations to banks amid the economic slowdown in the 2011-2015 period).

Gunawan emphasized the lower quality of Indonesian banking assets in 2017 stems from the uncertain global economic conditions, volatile exchange rates, and the yet unknown results of the credit restructuring program (however if these results will be positive then the NPL ratio may in fact ease later this year). Similar to last year, the biggest risks in terms of lower credit quality originate from Indonesia's trade and manufacturing sector. Gunawan added that the high capital adequacy ratio (CAR) of Indonesia's banking sector shows that this sector can absorb some risk as banks' reserves are big. Only a couple of banks may require more capital if conditions deteriorate rapidly in the period ahead.

Bank Indonesia official Erwin Rijanto said the continuation of the global economic slowdown in 2015-2016 made it difficult for part of the corporate world to fulfill their debt obligations. This caused the NPL ratio to rise, while banks needed to seek a higher amount of reserves to safeguard stability.

Currently, ongoing uncertainty regarding Donald Trump's presidency and the looming Fed Funds Rate hike could threaten conditions in Indonesia's banking sector and therefore Bank Indonesia advises local banks to safeguard enough reserves (for example by not distributing too much dividend).