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Bank Indonesia and domestic lenders are ready to launch a program targeting the 50 million poor people who would otherwise have no access to the banking system.

Under the program, the initial deposit would be lowered to Rp 20,000 ($2.14) and administrative fees would be eliminated. Most banks now require minimum deposits of Rp 50,000, and charge monthly fees of at least Rp 10,000. The special savings accounts have been dubbed Tabungan Ku, meaning “my savings.”

“Savings products have become too expensive for low-income people, meaning they cannot save their money in a bank,” said Darmin Nasution, acting governor of Bank Indonesia. “Saving is very important for the country and for the people. It could be used to finance credit expansion and support economic growth. It could also enable a person to become known by their bank so it might be easier for them to get loans.”

At least 70 large commercial banks and 910 rural lenders had committed to participate in the nationwide program, which will be launched by President Susilo Bambang Yudhoyono on Saturday.

Lenders said they welcomed the new program because it could lead to new business possibilities in the future.

“The program is not an unprofitable program because it will make our society become more banking-minded. It is true that we will not charge administrative fees but we will compensate by offering lower interest [on accounts]. The interest is only 0.75 percent per year compared with 3 percent on normal savings accounts,” said Arwin Rasyid, president director of PT Bank CIMB Niaga.

DE Setijoso, president director of PT Bank Central Asia, said most savings products included a full package of features, such as ATM cards and Internet banking, which lead to higher administrative fees to cover operating costs.

“However, we began to see that not all people need those features — they might need a really simple product,” he said.