Bank Indonesia (BI) has announced a nine-point policy package for the banking industry, including the much-awaited revision of its "uniform loan collectibility classification" regulation and minimum reserves requirement for lenders.

The central bank will also push on with its efforts to consolidate the banking industry through mergers and acquisitions according to its Indonesian Banking Architecture (API) roadmap, and encourage lenders -- including foreign banks -- to expand their financing to local businesses, particularly to small and medium-sized enterprises.

"The policies are intended to strengthen the banking industry, while provide further room for lenders to improve their financing capabilities and contribute to the economy," BI Governor Burhanuddin Abdullah told a banking forum late on Friday about the policies, to be implemented this year.

On the revision of its uniform loan collectibility classification regulation, BI said that it would temporarily ease the requirement to help banks improve their credit standings.

"The regulation will be implemented gradually and selectively from now on, but will still refer to prudent credit management practices, as it was intended for," explained BI's director for banking research and policy Muliaman D. Hadad.

The regulation requires multiple lenders giving credit to a single debtor to apply the same collectibility level on that loan. This means that all of the lenders must declare the loan as bad if the debtor cannot properly pay its installments to even one of the creditors.

The banking sector has complained about the regulation, arguing that it contributed to a high incidence of nonperforming loans (NPL) last year. State-owned lender Bank Mandiri was among those severely affected by the regulation, with its net NPL rising to 15 percent from BI's maximum 5 percent limit.

BI also said there was the possibility that the minimum reserves requirement for banks could be lowered if this year's macroeconomic conditions allow.

The central bank requires lenders to place between 5 percent to 8 percent of their capital as reserves with the central bank, as part of a monetary policy to prevent banks from using it for speculative foreign exchange trading.

Although the minimum reserve requirement has helped create monetary stability, it has limited banks in effectively channeling their funds as loans. BI sets a lower minimum reserve to banks with higher loan-to-deposit ratios and banks proven to use their funds for channeling credits.

Other policies in the package include encouraging banks to improve the quality of their personnel to international standards, and expanding their business into shariah banking.