Abstract:

Coronavirus disease (COVID-19) has an impact on the banking sector. There was a decline in performance for the Regional Development Bank (BPD). Disrupted banking performance will have an impact on financial system stability and have an impact on Indonesia's economic growth. Debtors need credit loosening, but there is no appeal for depositors to postpone withdrawals before maturity, so that bank liquidity is running low due to the unlimited number of withdrawals. The call for easing installment payments with a delay in installments from debtors to banks has caused banks, especially rural banks, to experience liquidity difficulties in stopping channeling new loans and focusing on providing liquidity to anticipate savings funds' withdrawals. The development of BPD performance will be seen from the addition of the number of banks, the loan to deposit ratio, the number of third party funds, and the number of loans. The analysis used is descriptive qualitative with data for the 2016-2020 period. The main findings are the need to optimize the banking intermediation function, maintain financial system stability, and support economic growth by enhancing the role of BPD in Indonesia.

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