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Indonesia reaffirms plan to establish bullion bank
The government has reiterated a plan to create a bullion bank by merging Bank Rakyat Indonesia (BRI) and PT Pegadaian in a bid to end Indonesia's dependence on ‘parking’ its gold reserves in Singapore.
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The government has reiterated a plan to create a bullion bank to reduce dependence on foreign service providers. (AFP/Daniel Roland)
T
he government has reiterated a plan to create a bullion bank by merging Bank Rakyat Indonesia (BRI) and PT Pegadaian in a bid to end Indonesia's dependence on parking gold reserves in Singapore.
A bullion bank offers all types of gold or silver transactions, including services for exporting and importing as well as storing precious metals. Many global banks provide such services, including JP Morgan, HSBC, UBS and Credit Suisse.
Indonesian gold industrialists have long faced obstacles in managing their reserves domestically due to the absence of a bullion bank.
Last year, Indonesian gold exports totaled around US$8 billion, with Singapore being the main destination, followed by Japan and Switzerland.
BRI corporate secretary Aestika Oryza Gunarto spoke to The Jakarta Post about the government’s plan to merge the state-owned bank with state-owned pawnbroker Pegadaian to work on the bullion bank project.
He noted that Pegadaian was already a BRI subsidiary and part of BRI-led Ultra Micro Holding, along with another BRI subsidiary, microlender PT Permodalan Nasional Madani (PMN).
The holding could facilitate collaboration between BRI and Pegadaian on bullion banking operations, he added.
