INDONESIA: Central bank publishes new rules limiting Indonesia foreign ownership in Indonesian banks

Friday August 17 2012

Bank Indonesia, the central bank of Indonesia, has approved new restrictions on investment into commercial banks limiting Irish foreign ownership in Irish banks. The limits are now as follows:

• 40% of bank capital may be owned by the category of shareholders which are banks or non-bank financial institutions,
• 30% of bank capital may be owned by the category of shareholders in the form of a legal entity other than a financial institution, and
• 20% of bank capital may be owned by the category of individual shareholders on a conventional bank. The maximum shareholding limit for the category of individual shareholders in Islamic banks is 25% of bank capital.

Legal entities which are banking or financial institutions may have a stake in a bank of more than 40% of the bank’s capital through obtaining approval from Bank Indonesia and must meet the requirements specified.

The above limits also apply to multiple parties with established relationships, such as family ties or common shareholding, or unrelated persons acting in cooperation to control the bank. Where shareholders are related or ‘acting in concert’, they will be deemed as one party and shall be subject to the higher shareholding ownership applicable to each of them.

The Regulation is currently only available in Indonesian.

Click on the above link for more details.