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Bank Indonesia has started gathering data from the banking industry as a first step toward setting “benchmarks” for costs such as expanding branch networks, advertising and salaries.

The central bank intends to use the data as a basis for formulating policy aimed at improving the efficiency of banks and lowering their stubbornly high lending rates.

Halim Alamsyah, Bank Indonesia’s director of banking research and regulation, said on Friday that the 14 largest lenders and several mid-sized banks had already submitted their data.

“We want to know the general situation and what the problems are, so that we can find solutions,” he said. “If we don’t know the problems how can we issue policies to cope with them.”

“There are standardized costs such as banks’ cost of funds, but there are also other cost components that remain unclear and differ between one lender and another. For example, overhead costs like IT development costs, expansion spending, promotion and salaries,” Halim said.

He said high costs were not necessarily a problem if they were justified. Banks that were expanding into rural areas might have higher IT and expansion costs associated with servicing large geographical areas, he said.

For example, Bank Indonesia might issue a regulation that could allow a bank with many rural branches to have less sophisticated IT systems that would allow it to reduce costs, Halim said.

“High salaries also might not be a problem since it reflected the fact that the banking industry need highly-qualified people who demand high salaries,” he said.

Banks, especially foreign lenders, have been widely criticized by the business community for earning strong net-interest margins — the difference between a bank’s lending rate and what it pays to borrow money — rather than lowering lending rates to help the economy.

According to a Bank Indonesia statement this month, the spread between banks’ cost of funds — the amount they pay to borrow money — and their lending rates narrowed slightly from November to December last year.

Eric Alexander Sugandi, an economist at Standard Chartered Bank Indonesia, said the central bank’s effort was positive and would help to correct misperceptions about the high margin between the BI rate and banks’ lending rates. Currently, there is no detailed explanation of the factors causing banks’ cost of funds to remain high, he said.

“If the data were already gathered, then we could see which lenders are efficient and which are not. And if the data is to be published, the inefficient banks would surely try to improve their performance,” Eric said. “Customers could also see that a bank could be very efficient and competitive while having a high margin.”

James Rompas, vice president director of PT Bank CIMB Niaga, said he welcomed the Bank Indonesia plan, adding that he was optimistic about strong credit growth this year as the economy improved.

CIMB Niaga is targeting 20 percent loan growth in 2010, lower than domestic banks average target of 23.8 percent. However, James said that the CIMB Niaga target might be revised upwards.