Prabowo Highlights Regional Governments Hoarding Funds in Banks, Expert Explains the Causes

This article was translated by AI. Read the original article on Kompas.com. See Original

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President Prabowo Subianto during the "Prabowo Answers" program uploaded on his YouTube account.(Tangkapan layar Youtube Prabowo Subianto.)

JAKARTA, KOMPAS.com - President Prabowo Subianto has highlighted the issue of many regional governments (Pemda) hoarding funds in banks.

These funds are transferred from the central government with the intention that they be used optimally for local development.

Prabowo even stated that he has evidence of some regional governments deliberately parking money in banking institutions.

“Sometimes it’s strange, the money from the Pemda is not used. We have evidence, it’s kept in banks; there are various reasons, including conflicts between regents and the regional parliament. So, the money has been transferred but not utilized,” Prabowo said, as quoted from the “President Prabowo Answers” program on Prabowo Subianto’s YouTube channel, Friday (18/9/2026).

According to Prabowo, this situation hampers development, especially infrastructure projects in villages.

Rp 234 Trillion of Regional Funds Parked in Banks

The issue of regional government funds lying idle in banks is not new.

The previous Finance Minister before Suahasil Nazara, Purbaya Yudhi Sadewa, also raised concerns about the large amounts of Pemda funds unused and still held in banks.

According to Ministry of Finance records, Pemda funds idle in banks reached Rp 194.1 trillion in 2021.

This figure rose to Rp 223.8 trillion in 2022. In 2023, the idle funds decreased to Rp 211.7 trillion, then further declined to Rp 208.6 trillion in 2024.

However, in 2025, the amount surged again to Rp 234 trillion.

Purbaya previously noted that Pemda funds stored in banks fluctuated over the last five years.

Observer Reveals the Causes

Executive Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira, believes that low regional budget absorption is not solely because Pemda intentionally saves funds in banks.

“Prabowo only views it from the central government’s perspective. The underutilization of regional budgets is due to many factors,” Bhima told Kompas.com on Friday (18/9/2026).

Bhima cited strong central government directives to regions, especially through the Special Allocation Fund (DAK), as a factor affecting budget absorption.

He said DAK is directed to finance central government priority programs. This condition limits the space for regional governments to determine their own development priorities.