LPS needs to continue to increase its credibility and effectiveness in ensuring the safety of customer savings

Oct 13, 2025 by wbrum.org 3 views

The Role of the Deposit Insurance Corporation (LPS) in Encouraging the Growth of Third Party Funds (DPK) in State-Owned Banks

The Deposit Insurance Corporation (LPS) plays a crucial role in ensuring the security of customer deposits in banks. This study aims to analyze the effect of the existence of LPS on the growth of third party funds (DPK) in state-owned banks (BUMN). The research focuses on two main questions:

How is the development of DPK in BUMN banks before and after the establishment of LPS?
What is the effect of LPS interest rates on DPK growth in state-owned banks?

Methodology

This study used monthly time series and cross-sectional data from January 2002 to December 2013. The data analysis was carried out using the Numerical Index and Panel Regression method with EViews. The numerical index uses a simple method, while the panel regression uses the Fixed Effect (FEM) model with the thirst test.

Results

The results of this study showed that the existence of LPS had a positive impact on DPK growth in BUMN banks. The existence of LPS increases public confidence in the banking system, especially on state-owned banks. This is indicated by the increase in DPK after the establishment of LPS.

However, the results also showed that LPS interest rates had an influence on the total DPK in BUMN banks, but the effect was negative and significant. LPS interest rates that are lower than DPK interest rates in state-owned banks can cause state-owned banks to lose attractiveness for customers. This is because customers tend to choose to put money in LPS because it is considered safer and has a more definite return.

Further Analysis

Positive Impact of LPS

The existence of LPS increases public confidence in the banking system, especially on state-owned banks. This is indicated by the increase in DPK after the establishment of LPS. The positive impact of LPS can be attributed to the following factors:

Increased confidence: The existence of LPS increases public confidence in the banking system, which leads to an increase in DPK.
Improved risk management: LPS helps to manage risk by providing a safety net for depositors, which reduces the risk of bank failures.
Enhanced credibility: LPS enhances the credibility of state-owned banks, which leads to an increase in DPK.

Negative Effects of LPS Interest Rates

LPS interest rates that are lower than DPK interest rates in state-owned banks can cause state-owned banks to lose attractiveness for customers. This is because customers tend to choose to put money in LPS because it is considered safer and has a more definite return. The negative effects of LPS interest rates can be attributed to the following factors:

Reduced attractiveness: LPS interest rates that are lower than DPK interest rates can cause state-owned banks to lose attractiveness for customers.
Increased competition: LPS interest rates can increase competition among banks, which can lead to a decrease in DPK.
Reduced profitability: LPS interest rates that are lower than DPK interest rates can reduce the profitability of state-owned banks.

Conclusion

This study concluded that LPS has an important role in encouraging DPK growth in state-owned banks. However, keep in mind that LPS interest rates that are too low can have a negative impact on the attractiveness of state-owned banks for customers.

Recommendation

LPS needs to continue to increase its credibility and effectiveness in ensuring the safety of customer savings.
BUMN banks need to continue to innovate in products and services to attract customers and remain competitive in attracting DPK, even though they are faced with low LPS interest rates.

The Uniqueness and Benefits of the Article

This article provides a comprehensive analysis of the role of LPS in encouraging DPK growth in BUMN banks, taking into account the positive and negative impacts of LPS interest rates. This article is useful for stakeholders in the banking sector, such as regulators, bankers, and academics, in understanding market dynamics and determining the right strategy to encourage DPK growth in the future.

Key Takeaways

The existence of LPS has a positive impact on DPK growth in BUMN banks.
LPS interest rates have a negative and significant effect on the total DPK in BUMN banks.
LPS needs to continue to increase its credibility and effectiveness in ensuring the safety of customer savings.
BUMN banks need to continue to innovate in products and services to attract customers and remain competitive in attracting DPK, even though they are faced with low LPS interest rates.

Future Research Directions

Further research is needed to explore the impact of LPS on DPK growth in private banks.
Research is needed to examine the impact of LPS interest rates on the profitability of state-owned banks.
Future research should also investigate the impact of LPS on the risk management practices of state-owned banks.

Frequently Asked Questions

Q1: What is the role of the Deposit Insurance Corporation (LPS) in the banking sector?

A1: The Deposit Insurance Corporation (LPS) is an institution formed to ensure the security of customer deposits in banks. It plays a crucial role in maintaining public confidence in the banking system and protecting depositors' funds.

Q2: How does the existence of LPS affect the growth of third party funds (DPK) in state-owned banks (BUMN)?

A2: The existence of LPS has a positive impact on DPK growth in BUMN banks. It increases public confidence in the banking system, especially on state-owned banks, leading to an increase in DPK.

Q3: What is the effect of LPS interest rates on DPK growth in state-owned banks?

A3: LPS interest rates have a negative and significant effect on the total DPK in BUMN banks. LPS interest rates that are lower than DPK interest rates in state-owned banks can cause state-owned banks to lose attractiveness for customers.

Q4: How can LPS improve its credibility and effectiveness in ensuring the safety of customer savings?

A4: LPS can improve its credibility and effectiveness by:

Increasing transparency in its operations and decision-making processes
Enhancing its risk management practices to minimize the risk of bank failures
Providing regular updates on its activities and performance to stakeholders

Q5: What strategies can BUMN banks use to remain competitive in attracting DPK despite low LPS interest rates?

A5: BUMN banks can use the following strategies to remain competitive:

Innovating in products and services to attract customers
Offering competitive interest rates and other benefits to customers
Enhancing their risk management practices to minimize the risk of bank failures

Q6: What are the implications of this study for regulators, bankers, and academics?

A6: This study provides valuable insights for regulators, bankers, and academics on the role of LPS in encouraging DPK growth in BUMN banks. It highlights the importance of LPS in maintaining public confidence in the banking system and protecting depositors' funds.

Q7: What are the limitations of this study?

A7: This study has the following limitations:

It uses data from January 2002 to December 2013, which may not be representative of the current banking landscape.
It focuses on state-owned banks (BUMN) and may not be applicable to private banks.
It does not examine the impact of LPS on the risk management practices of state-owned banks.

Q8: What are the future research directions for this study?

A8: Future research directions for this study include:

Examining the impact of LPS on DPK growth in private banks
Investigating the impact of LPS interest rates on the profitability of state-owned banks
Exploring the impact of LPS on the risk management practices of state-owned banks