Bank Indonesia put out its latest rate transparency report last week, showing banks offering loan rates that are 4.75% more than the policy rate of 5.75%, while one lender has a spread of as much as 11.99%. The report is meant to encourage banks to offer more competitive and efficient rates to speed up economic growth.

The biggest banks are not exempt. They are ranked high on a global list of major lenders with the widest net interest margins, according to data compiled by Bloomberg.

State-owned PT Bank Rakyat Indonesia’s net interest margin – the gap between how much it earned in interest on loans compared to the amount it paid in interest on deposits – was 7.85% at the end of 2022, up from 7.7%% in the previous year, while PT Bank Mandiri, also a state bank, had a margin of 5.47%, compared with 5.09% in 2021.

President Joko Widodo raised concern over the high margin during a speech to financial regulators and company leaders in Jakarta last week, warning about the impact it might have on small borrowers.

“Our banks’ NIM is so high, probably the highest in the world,” he said. “I want the banks to give more support for the small business sector. They are our strength. Don’t forget them.”

In response to the president’s remarks, the Financial Services Authority plans an evaluation to find “an ideal level” for bank margins, said Dian Ediana Rae, head of banking supervision at the agency also known as OJK.