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Bank Indonesia will introduce a new banking regulation
barring investors from having majority ownership in more than one bank,
central bank Governor Burhanuddin Abdullah said Thursday.
"This (new regulation) is aimed at increasing the effectiveness of
banking supervision," Burhanuddin said as quoted by news portal
detik.com.
Investors who own shares in more than one bank will be asked to reduce
their holdings, merge the banks or set up a holding unit.
He added that the consolidation process was expected to be completed by
the end of 2008.
Burhanuddin did not say when the new ruling, called the single presence
policy, would be issued, but the director for research and banking
regulations, Muliaman D. Hadad, said the new regulation was expected in
August.
Bank Indonesia wants the country's 131 banks to merge into fewer,
bigger lenders under a 10-year blueprint known as the Indonesian
Banking Architecture.
The new rule will apply to controlling shareholders, or those with a
stake of more than 25 percent, Muliaman said.
"It will help the consolidation process in the banking sector," Fendi
Susiyanto, who helps manage about US$116 million at the wealth
management unit of Bank Permata, told Bloomberg. The government should
provide "clear guidance" on how to implement it, he said.
"It's good for Indonesia to have a few strong, solid banks," said Jahja
Setiaatmadja, chief financial officer at Bank Central Asia, Indonesia's
second-biggest lender by assets. "There are too many banks in
Indonesia."
Bloomberg said the new ruling might affect investments by Malaysia's
Khazanah National Bhd and Singapore's Temasek Holding Pte in local
banks, and prompt mergers among banks with the same shareholder.
Temasek and Deutsche Bank AG own a combined 69.5 percent stake in Bank
Danamon, Indonesia's fifth-largest lender. Temasek and Kookmin Bank,
South Korea's largest lender, and Barclays Capital also have a combined
56.9 percent stake in Bank Internasional Indonesia, the nation's sixth
largest bank.
Temasek, which has more than $65 billion of assets globally, also owns
12 percent of Standard Chartered Plc, a UK-based lender that, along
with PT Astra International, has a 64 percent stake in Bank Permata.
"We are aware that Bank Indonesia is reviewing its regulations with
regard to ownership of banks in Indonesia," Temasek spokeswoman Rachel
Lin said by e-mail to Bloomberg. "We will study the proposed changes
when they become available."
Khazanah Nasional has a directly held 87.52 percent stake in Bank
Lippo. It also owns Bumiputra-Commerce Holdings Bhd., Malaysia's
second-biggest bank, which in turn has a 64.79 percent stake in Bank
Niaga.
"We don't have the full details yet and are unable to comment on it,"
Khazanah spokesman Ahmad Shahizam Shariff said in Kuala Lumpur about
the proposed ruling.
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