Many banks in Indonesia's banking sector are still busy restructuring to cope with the higher NPL ratio by being more selective with disbursing new credit. However, Adityaswara is sure that as long as there is demand, banks will certainly be able to boost credit growth.

Indonesia's (gross) NPL ratio was at 1.8 percent at end-2013. Afterwards the figure started to rise as clients were affected by the economic slowdown and sliding commodity prices.

Although overall the NPL ratio in Indonesia's banking sector declined in June, Bank Rakyat Indonesia (BRI), posted a slight increase in its NPL ratio. BRI, a state-controlled bank that is listed on the Indonesia Stock Exchange, saw its NPL ratio rise to the range of 2.2 - 2.4 percent in the first half of 2017 amid slowing credit growth during the January-June 2017 period. "This figure is somewhat higher compared to December 2016 but more or less the same compared to March 2017", BRI Finance Director Haru Koesmahargyo said.

BRI continues to make efforts to improve its NPL ratio through restructuring and extending the time period for those customers that are considered to have good prospects. Therefore, the bank is optimistic its NPL ratio will have declined by the year-end.