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ajor banks say they are ready for the Financial Services Authority's (OJK) integrated supervision on financial conglomerates that control a significant portion of the financial industry's assets.

Eugene Keith Galbraith, vice president director of private lender Bank Central Asia (BCA), said it was high time for the regulator to implement such supervision.

'It will compel banks to see their businesses in an integrated manner, which is not the case now,' he told The Jakarta Post in a telephone interview on Friday.

According to Galbraith, the supervision will help strengthen the overall banking industry and lower risks that may arise from the
operations.

BCA is included on the OJK's list of 31 financial conglomerates, most of which are headed by banks. Its conglomerate currently consists of multifinance firms, banks, a securities firm, insurance companies and a money-lending company in Hong Kong.

Data from the regulator showed that the 31 conglomerates managed almost 70 percent of the total assets of the country's banking industry, equal to Rp 5.3 quadrillion (US$441.41 billion), by the end of June.

As many as 10 conglomerates are vertically structured groups, while 13 others are horizontally structured and the remaining eight are mixed.

The supervision will be implemented on all groups by the end of 2015.

However, the four largest banks by core capital ' known as BUKU IV lenders ' will be the subject of scrutiny earlier, as supervision on them is scheduled to be fully implemented by mid-2015.

Besides BCA, lenders in that category also include state lenders Bank Mandiri, Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI).

Boedi Armanto, head of the OJK's supervisory framework and crisis management department, said that part of the supervision would include the execution of three new regulations on risk management, good governance and capital requirements.

Meanwhile, Mandiri president director Budi Gunadi Sadikin said that the lender ' now the biggest financial group in Indonesia ' had so far complied with existing requirements set for each of its subsidiaries.

'We have met the CAR [capital adequacy ratio] requirement for our banking entities, the MKBD [net adjusted working capital] requirement for our securities entity and the RBC [risk-based capital] requirement for our insurance entities, among other requirements,' he said.

Mandiri's conglomeration consists of banks, a securities firm, a multifinance company, insurance firms and a remittance office. The amount of its consolidated assets reached Rp 764.94 trillion in June.

Separately, OCBC NISP president director Parwati Surjaudaja said the upcoming regulations should be well-supported by banks.

'For OCBC NISP, we should make sure that all transactions and relations with affiliated companies are free from conflicts of interest, [carried out] at arm's length and with a proper GCG [good corporate governance] basis,' she said.

OCBC NISP has no subsidiary at the moment, but is related to several financial companies that are owned by Singapore's OCBC Bank Group, its majority shareholder.

Some of the affiliated firms are securities firm OCBC Sekuritas Indonesia and life insurer Great Eastern Life Indonesia.