Glossary - Bank Sentral Republik Indonesia
August 26, 2019
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Terminology Description
Legal Lending Limit The percentage of maximum permitted provision of funds in comparison with bank capital.
Lender of last resort the function of a central bank in extending credit to banks to overcome liquidity problems caused by a mismatch in funds and to prevent systemic crisis
Liquidity Risk Risk arising from, but not limited to, the inability of the bank to settle liabilities when due and payable
Liquidity Risk risk that an institution will not be able to execute a transaction at the prevailing market price because there is, temporarily, no appetite for the deal on the other side of the market
Loan Extended Provision of funds or equivalent claims based on a loan agreement between a bank and a party, in which the borrowing party is required to repay the debt after certain period together with a sum of interest. Loan includes: (i) Purchase of securities from a customer accompanied with a Note Purchase Agreement (NPA). (ii) Negotiation of claims in the course of factoring.
Loan Restructuring The effort undertaken by a bank in its lending operation to enable debtors to settle their obligations, through: (i) Lowering the interest rate; (ii) Writing-off loan interest; (iii) Writing-off loan principles; (iv) Extending loan maturity; (v) Adding facility; (vi) Taking over debtor assets in compliance with prevailing regulations; (vii) Converting loan into temporary equity participation in the debtor’s company;
Loan to Deposit Ratio (LDR) Ratio of loans to deposits of the bank in Rupiah and foreign currency includes: (i) Checking account, time deposits and savings. (ii) Liabilities from non-banks more than three months and not included subordinated loans. (iii) Securities issued by banks more than three months. (iv) Core capital and subordinated loan.
Loan to Deposit Ratio (LDR) Credit divided by Depositor Funds. Credit is total credit extended to third parties (excluding interbank lending), while depositor funds encompass demand deposits, savings deposits and time deposits (excluding interbank deposits
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