Indonesian Banks Focus on CASA Growth Amidst Tightening Liquidity and Declining Individual Deposits in Early 2025

Indonesian banks are prioritizing the growth of low-cost funds, specifically current account saving accounts (CASA), in 2025. This focus comes amid tightening liquidity conditions, increased competition, and a contraction in individual deposits. Bank Indonesia (BI) data reveals that total deposits in January 2025 reached IDR 8,599.4 trillion, a 5.3% year-on-year increase. However, individual deposits contracted by 2.6%, a deeper decline compared to the 2.1% contraction in December 2024. This contraction marks the third consecutive month of negative growth for individual deposits. Meanwhile, loan disbursements in January 2025 remained strong at IDR 7,684.3 trillion, growing by 9.6% year-on-year. Bankers acknowledge these challenges. Maybank Indonesia is focusing on digital platforms to build CASA. CIMB Niaga recognizes the seasonal nature of early-year deposit contractions but anticipates continued tight liquidity. Allo Bank is developing innovative products targeting younger demographics to avoid interest rate wars. Bank Jatim is considering issuing bonds as a funding strategy beyond CASA.