Local banks ask for reciprocal regulation

National banks have urged for reciprocal treatment, particularly in establishing banks outside Indonesia, an association leader told lawmakers and central bankers on Monday.

Gatot M. Suwondo, the chairman of the Indonesian Association of State-Owned Banks (Himbara), on Monday said he begged for equal treatment of foreign banks operating in Indonesia and Indonesian banks overseas.

“It is very complicated and difficult to open a branch overseas, in Singapore and Japan, for example, but they can open branches as they want right away here,” Gatot said in his remarks at a working meeting between Bank Indonesia (BI) officials, banking associations and the House of Representatives working group on inflation and the benchmark interest rate.

Gatot, who is also president director of state-run Bank Negara Indonesia (BNI), said BNI and Bank Rakyat Indonesia (BRI) were “facing difficulties with their New York branches because there are pressures to turn these branches into subsidiaries”.

Gatot's concerns were shared by several other bankers who had previously said regulators treated them unfairly in terms of requirements foreign banks needed to satisfy to open branches here, while Indonesian banks faced tough standards overseas.