China's largest bank, Industrial and Commercial Bank of China (ICBC), and its third largest bank, China Construction Bank (CCB), plan to take over Temasek Holding's shares in Bank Internasional Indonesia.

Bank Indonesia director for research and banking administration Halim Alamsyah confirmed Monday the central bank had received proposals from the two banks for the shares.

"We received their proposals last week, but we haven't decided anything. We are still studying the proposals," Halim said during an impromptu meeting with reporters.

He said the central bank had no reservations about accepting the proposal from the foreign banks. However, he said he would have been "glad" if it was a local bank.

"We always encourage banks to launch mergers and acquisitions to strengthen their assets. We will simplify the merger and acquisition regulations so the process can move faster," he said.

Bisnis Indonesia daily reported Monday the country's largest bank by assets, Bank Mandiri, was planning to buy Temasek's shares in BII.

Bank Mandiri president director Agus Martowardojo confirmed the bank was studying the option of acquiring a bank, but refused to specify a name.

Temasek plan to divest its shares in response to the central bank's single presence policy, which forbids the same shareholder from owning majority stakes in more than one bank.

Since 2003, Temasek's Fullerton Financial Holdings Pte Ltd. has owned 75 percent of the shares of the Sorak consortium, which in turn owns a 55.85 percent stake in BII, the country's sixth-largest bank by assets.

Fullerton also holds a 59 percent majority share in the country's fifth-largest bank, Bank Danamon.

China's biggest bank, Industrial and Commercial Bank of China had a market capitalization of US$254 billion as of July last year, with total assets of $893 billion as of June 2006.

ICBC was simultaneously listed on both the Hong Kong Stock Exchange and Shanghai Stock Exchange on Oct. 27, 2006.

It had the world's largest IPO to date, raising at least $14 billion in Hong Kong and another $5.1 billion in Shanghai.

China Construction Bank, founded in 1954, is a member of the Global ATM Alliance, a joint venture of several major international banks that allows customers of the banks to use their ATM cards or check cards at other banks within the Global ATM Alliance with no fees when traveling internationally.

The CCB, had China's second largest IPO, raising $7.6 billion on the Shanghai Stock Exchange late last year.

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