Name : Rifa Hana Zaimah
Class : 3EB19
NPM : 26216366
Higher
Premiums For Banks With Lower Ratings : LPS
A
differential premium system (DPS) imposed by deposit insurance corporations on
banks and 1other financial institutions encourages beter risk
management, and 2expert has claimed. According to the deposit
insurance corporation’s (LPS) executive chairman, Kartika “Tiko” Wirjoatdmodjo,
3the
implementation of a DPS would eventually help ensure the stability of the
country’s financial system. “Banks that have a low rating on our
soundness scale, due to their high risk of failure and poor management, will be charged higher premiums
compared to those that score better ratings,”
4he said on Friday on the sidelines of the Third
International Workshop on Intergrated Protection Scheme held by the
agency in Nusa Dua, Bali.5“That will motivate them to improve their
management systems and their ratings in order to avoid paying high
premiums. 6It will benefit us as well because 7it
will enhance our financial stability,” 8he added. 9The
LPS hopes to introduces a DPS this year to replace 10the
current system that imposes an annual o.2 percent premium equally on all banks
on their average thirdparty funds. Under
the new system, 11the annual rate will be set at between 0.1 percent and
0.3 percent, depending on each
bank’s rating. 12It has prepared five rating levels, which are
calculated using three indicators – a bank’s own financial ratios; a bank
soundness assessment evaluated by the Financial Services Authority’s (OJK); and
the bank’s compliance with LPS regulations.
13The annual rate will
stand at 0.1 percent for banks with
a rating of 1, 0.15 percent for a 2 rating, 0.2 percent for a 3 rating, 0.25
percent for a 4 rating, and 0.3 percent for a rating of 5. According to Tiko
there are about 10 commercial lenders in the country that qualify for a 5
rating. At the moment, the LPS only
covers saving or deposits up to a maximum of Rp 2 billion (US$ 176,113) for
each Indonesian Depositor. 14It requires banks to charge a maximum of 7.5 percent
interest rate for deposits in rupiah, 1.5
percent for deposits in foreign currencies and 10 percent for deposits in rural
banks (BPR). 15Its insurance members comprise 109 commercial banks, 11 sharia banks and around 1,700 BPRs. The total
of insured deposits in commercial and sharia banks amounted to Rp 2.11
quadrillion as of December 2013, equal to 147.63 million accounts. No data is
currently available on the BPR’s deposits. Meanwhile, Yee Ming Lee, the general
manager for policy and International division at the Perbadanan Insurans
Deposit Malaysia (PDIM), 16which is Malaysia’s deposit insurance corporation,
said that 17Malaysian lenders had been coming to the agency,
looking for assistance to improve their risk management system. 18The
PDIM has set its annual premium rates from 0.05 percent to 0.4 Percent,
established the deposit protection limit at 250,000 ringgits ($76,233) per
depositor, and divides lenders into four rating levels. 19Currently there are 27
commercial banks and 21 islamic banks operating in the country. 20Lee said that banks might need to invest more in
information technology and
internal control to assist them with improvments in their risk-management
systems.
Formula Tenses :
1. Other
financial institutions encourages beter risk management.
Simple present tense ( S + V1 (s/es) + O )
2. Expert
has claimed.
Present perfect tense (S
+ Have /Has + V3 +O +Adv. Of time)
3. The
implementation of a DPS would eventually help ensure the stability of the
country’sfinancial system.
Simple present tense ( S
+ V1 + O)
4. He said on Friday on the sidelines of the
Third International
Simple
Past Tense ( S + V2 + O+Adv. Of time)
5. That
will motivate them to improve their management systems.
Simple future ( S + Will
+ V1 + O)
6. It
will benefit us as well
Simple future ( S + Will
+ V1 + O)
7. It will enhance our financial stabilities
Simple future ( S + Will
+ V1 + O)
8. he
added.
Simple past tense ( S +
V2 + O )
9. The
LPS hopes to introduces a DPS this year.
Simple present tense ( S + V1 (s/es)
+ O )
10. Current system that imposes an annual o.2
percent premium equally on all banks on their average thirdparty funds.
Simple present tense ( S + V1 (s/es)
+ O )
11. The annual rate will be set at between 0.1
percent and 0.3 percent
Simple future ( S + Will + V1 + O)
12. It
has prepared five rating levels.
Present perfect tense ( S
+ Have/has + V3 + O)
13. The
annual rate will stand at 0.1 percent for banks.
Simple future ( S + Will
+ V1 + O)
14. It
requires banks to charge a maximum of 7.5 percent interest rate for deposits in
rupiah
Simple present tense ( S
+ V1 (s/es) + O )
15. Its
insurance members comprise 109 commercial banks.
Simple present tense ( S
+ V1 + O )
16. Which
is Malaysia’s deposit insurance
Simple present tense ( S
+ V1 + O )
17. Malaysian
lenders had been coming to the agency.
Past perfect continous tense ( S +
Had+ been + Ving + O)
18. The
PDIM has set its annual premium rates from 0.05 percent to 0.4 Percent.
Present perfect tense ( S + Have /
has + V3 + O)
19. Currently
there are 27 commercial banks and 21 islamic banks operating in the country.
Simple
present continous tense ( S + To be
(Is/am/are) + Ving + O )
20. Lee
said that banks might need to invest more in information technology.
Simple
Past Tense ( S + V2 + O+Adv. Of time)
