Bank Indonesia (BI) relaxed the Loan to Value / Financing to Value (LTV / FTV) ratio for loans and property financing to a maximum of 100 percent.

Governor of Bank Indonesia (BI), Perry Warjiyo, said the regulation applies to all property types, including landed houses, flats, and shophouses or office houses, for banks that meet certain non-performing loans NPL / NPF ratios. Also, BI removed the loan growth provisions in the property sector while still observing prudence and risk management principles.

"The LTV / FTV easing is effective March 1, 2021, to December 31, 2021," he said at a virtual press conference, Thursday (18/2).

The application of the rules for the highest LTV / FTV ratio is differentiated between banks based on the NPL ratio with a limit of 5 percent.

"Banks with NPL / NPF below 5 percent, the 100 percent LTV / FTV provisions apply. For banks with an NPL above 5 percent, they are still loosened, but the easing is not up to 100 percent, "said Perry.

The loosening of LTV / FTV for banks with NPLs above 5 percent can only reach 90-95 percent, except for purchasing the first house and apartment under type 21.