INDONESIA: Indonesia Plans to Limit Indonesia Foreign Bank Ownership

Monday April 30 2012

It has been reported that Indonesia’s central bank is planning to limit Indonesia foreign bank owenership as has set caps on single-shareholder stakes in the country’s commercial banks; a move that could force some foreign investors in the banking sector to sell down their stakes and delay the biggest ever acquisition in the country.

Bank Indonesia likely will issue a regulation in May that would limit the stake that a single shareholder can hold in the country’s commercial banks, Gov. Darmin Nasution said on Friday. Under current rules, an investor can own up to 99% of an Indonesian commercial bank.

This follows a recently enacted regulation which requires foreign mining firms to sell controlling stakes to Indonesians within 10 years of starting operations. Another regulation released recently dictated that foreigners wouldn’t be allowed in many of the most important management positions of Indonesian companies.

This information will be updated as more details become available