INDONESIA: Bank Indonesia to limit Indonesia bank ownership

Wednesday September 7 2011

Various media sources are reporting that Bank Indonesia, the banking regulator, is to introduce a limit on Indonesia bank ownership in domestic banks to encourage good governance in the sector. The rules would apply to single investors, whether national or foreign. Rules introduced following the 1998 Asian financial crisis liberalised investment in the banking sector, with investors permitted to freely own up to 99% of local banks. However, following several fraud and embezzlement scandals, Bank Indonesia is proposing to introduce a cap on single-investor ownership to under 50%. This information will be updated as further details become available.