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Jakarta Post

Insight : BI must reorganize bank ownership

  • Lin Che Wei

Jakarta   /   Wed, June 6 2012   /  07:46 am

The acquisition plan of Bank Danamon by DBS bank of Singapore has changed the dynamic of the Indonesian banking sector. The authorities, including Bank Indonesia and the Finance Ministry, are reacting by revising bank ownership rules.

Calls for more nationalistic rulings on bank ownership have been heard for quite some time from House of Representative members. These could be seen during the last fit and proper test for Bank Indonesia governor, where the governor — Darmin Nasution — was required to ensure that national banks became masters in their own house. So what type of ownership regulation is being considered?

The first option is to maintain the status quo, which is preferred by most foreign banks and champions of the idea that bank ownership should not be dependent on nationality. During a recent book launch with Tempo magazine, BI Deputy Governor Muliaman Hadad...