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Holding company paves way for specialty state banks: BI
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A Bank Indonesia (BI) employee marks damaged notes at a cash replacement counter on Jan. 26 as part of a BI policy to provide the public with a good-quality medium of exchange. BI governor Agus Martowardojo has voiced support for the government’s plan to create a holding company for state-owned banks, saying doing so will boost the banks' efficiency. (thejakartapost.com/Wienda Parwitasari)
T
he establishment of a holding company for Indonesian state-owned banks will boost efficiency in the banks' business plans and strategy, allowing Indonesia to see large-scale specialty lenders by 2018, Bank Indonesia Governor Agus Martowardojo has said.
According to Agus, the holding company may allocate special functions to four state-owned lenders, namely Bank Mandiri , Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI) and Bank Tabungan Negara (BTN).
"It can be done by a holding company. I project that the initial benefits will be the alignment of business plans and business strategies," he said in Jakarta on Thursday, adding that greater benefit could be obtained if the banks essentially merged into one firm, operated by one board of directors.
Earlier, the State-Owned Enterprises Ministry hinted that PT Danareksa would be the investment holding company, or the parent company of the four state-owned banks, in a bid to strengthen the national banking system, with greater equity or capital, as well as the ability to seek greater access to funding.
"Danareksa is certainly eligible to become the holding company of state banks," said the ministry's deputy of financial, survey and consulting services, Gatot Trihargo, as quoted by Antara news agency.
By forming a holding company, he explained, the four state banks, as the subsidiaries, would be synchronized, including in IT. However, the establishment of the holding company might take a long time, as the banks were publicly listed companies, he noted.
"Although the ministry is the controlling shareholder in the state-owned banks, many investors in the capital market also hold stakes," he said. Therefore, any strategic changes must be subject to the approval of the general meeting of shareholders, and confidential matters cannot be immediately disclosed. (ags)
