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outheast Asia’s largest bank, Singapore’s DBS Group Holdings Ltd., is “confident” of securing approval to takeover Indonesia’s sixth-biggest lender, Bank Danamon (BDMN), despite receiving a frosty reception from local lawmakers, bankers and regulators.

“Given the way the Indonesian laws are structured, the bank is fairly confident and hopeful that it will receive approval within the second half of the year,” Karen Ngui, a managing director at DBS Group, told The Jakarta Post in a statement sent by email on Wednesday.

DBS’ planned US$7.2 billion takeover of Danamon, which would be the biggest such takeover in Southeast Asia, may face a setback after banking regulator Bank Indonesia (BI) hinted that to approve the acquisition, the central bank would seek for equal treatment for Indonesian banks wanting to operate in Singapore, deputy governor Halim Alamsyah told reporters on Wednesday.

“If we allow foreign banks to operate freely in our country, will our banks be able to do the same on foreign soil? This needs to be addressed,” Finance Minister Agus Martowardojo said at a separate event on the same day.

Bank Negara Indonesia (BBNI) is the only Indonesian bank with a so-called full banking license for a wider range of services in Singapore. Citigroup is the only foreign player that does not face limits on the number of branches and teller machines (ATMs), Reuters reported.

“Singapore is probably the most protectionist banking sector in Asia,” said Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd., citing restrictions on the number of ATMs and branches foreign banks are allowed to operate in the city-state.

“The Indonesian government is right to make their little pitch and I would do the same if I were them,” he added, as quoted by Bloomberg.

The Monetary Authority of Singapore declined to say if it had been approached by BI, asking for more room for Indonesian lenders to expand in the city-state, saying only “our dealings with other regulators are confidential”.

DBS, however, said it was confident it had met the regulatory requirements for the Danamon acquisition, including conducting a mandatory tender offer for minority investors and planning to refloat its shares on the Indonesian bourse.

“We intend to keep Danamon shares listed and DBS will hold no more than 80 percent of all the issued Danamon shares within two years after the completion,” Ngui said, brushing off lawmakers’ concerns of a potential banking monopoly.

DBS will acquire its parent company Temasek Holding Pte.’s 67.37 percent stake in Danamon at Rp 7,000 per share, but a capital market rule requires DBS to make a share purchase offer for minority shareholders and a banking regulation allows the lender to buy up to 99 percent stake in Danamon.

“DBS will work closely with local regulators to ensure that the process runs smoothly and meets all regulatory requirements,” Ngui said. “This proposed acquisition is an acquisition for growth, and a Danamon– DBS combination will bode well for Indonesia.”

For DBS, the acquisition will help it boost growth as it expands to Southeast Asia’s largest market, whose economy has been growing by more than 6 percent per year over the past two years.

Two-thirds of Danamon’s loan book is on microfinancing, while DBS’ lending forte is on corporate and small and medium enterprises.

Hans David Tampubolon contributed to this story