I

n the latest step for Bank Mutiara it is to be taken over by an investment firm, J Trust Co Ltd. The Japanese company has been named the winner of the tender in the divestment of PT Bank Mutiara by the Deposit Insurance Corporation (LPS).

Currently J Trust is awaiting examination by the Financial Services Authority before it officially takes over Bank Mutiara, formerly known as Century Bank. Prior to J Trust'€™s entry, the national banking industry has seen the mushrooming of foreign banks, mixed banks and foreign-owned national private banks.

The share of national private bank assets reduced by 20 percent from 42 percent in 1998 to 22 percent in 2011. Likewise, the share of state-owned bank assets declined by 9 percent, from 44 percent to 35 percent in the same period. Conversely, the share of foreign-owned private banks swelled from almost zero to 21 percent. Combined with foreign banks and mixed banks, the total share of foreign-owned banks in Indonesia amounted to 34 percent.

Serious attention should be paid by relevant authorities to this unfair competition, with the national banking market being undermined by foreign forces and overseas expansion proving difficult.

Besides revising Government Regulation No.29/1999 on the purchase of commercial bank shares, the government should explore diplomacy and cooperation with the main countries whose banks are in Indonesia.

'€” Republika, Jakarta