ID :
201032
Sat, 08/13/2011 - 11:31
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Shortlink :
https://oananews.org//node/201032
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POSER OVER BANK INDONESIA MOVE TO FREEZE PERMITS FOR ACQUISITION OF LOCAL BANKS
JAKARTA, Aug 13 (Bernama) -- The temporary suspension on the issuance of permits for the aquisitions of local banks by foreign companies remains an open question as the governor of Bank Indonesia (BI) and officials of the central bank make conflicting comments.
English daily The Jakarta Post Saturday quoted BI officials as saying the central bank has temporarily suspended the issuance of permits for acquisitions of local banks by foreign companies until a regulation on bank ownership caps has been issued later this year.
"We are currently halting, and for now are not issuing, new permits for the acquisition of local banks, as we await the regulation on bank ownership," BI spokesman Difi A. Johansyah reportedly told the daily on Friday.
On Friday, BI director for banking licence and regulation, Joni Swastanto, said he was "instructed" by the board of governors not to issue permits for foreign investors requesting permission to acquire local lenders.
However, BI Governor, Darmin Nasution, has denied the policy, saying: "We don’t have any policy that limits foreign (investors) for acquisition".
"There is no limitation. Therefore (acquisition) processes could continue," Darmin told reporters at BI headquarters here, the newspaper reported.
Asked on the conflicting comments by the central bank officials, BI
deputy governor Muliaman Hadad, who oversees banking research and regulation, declined to answer.
"Ask Pak Darmin, (I will) have the same answer," he said.
Banking expert, Mirza Adityaswara, said even without an official moratorium, it was legitimate for BI not to issue permits for or delay acquisition requests by investors who wanted to acquire stakes in the country’s banks.
"It is the regulator’s right. The discretion is with the central bank," Mirza told The Jakarta Post.
Malaysia’s Affin Bank backed off from its plan to acquire Bank Ina Perdana earlier this month in light of BI’s ongoing study of bank ownership cap rules.
China Construction Bank is currently in talks to buy stakes in Bank Maspion.
The ruling will limit maximum single ownership in the nation’s banks to below 50 per cent, which will be applied to both local and foreign investors in a bid to support good corporate governance and avoid abuse of power by majority owners in the banking industry.
"The plan to impose such rules has been announced, so investors will need to re-assess their plans and wait and see," Mirza said.
Darmin previously said the rules might be issued this year with a lengthy transition period, which economists said could be at least five years, as investors might have to readjust their shares through divestment, strategic sales, public offerings, or other sales methods.
Indonesia is home to some of the most profitable banks in South-East Asia, given the country’s growing economy.
"Our banks have good prospects, so if (investors) cancel acquisitions, others will be attracted," Difi said.
"We want investors interested in our banks to have good corporate governance and contribute to growing the national banking industry, not just those who seek profits," he added.
Indonesia currently allows investors, including foreigners, to own as much as a 99 per cent stake in local banks, a regulation locally viewed as excessively loose, particularly in the context of foreign investors, as other emerging markets have limits on bank ownership.
Bankers here have complained that the rules provided too many opportunities for foreign investors to expand in Indonesia, while they have suffered difficulties in expanding their businesses overseas.
-- BERNAMA
English daily The Jakarta Post Saturday quoted BI officials as saying the central bank has temporarily suspended the issuance of permits for acquisitions of local banks by foreign companies until a regulation on bank ownership caps has been issued later this year.
"We are currently halting, and for now are not issuing, new permits for the acquisition of local banks, as we await the regulation on bank ownership," BI spokesman Difi A. Johansyah reportedly told the daily on Friday.
On Friday, BI director for banking licence and regulation, Joni Swastanto, said he was "instructed" by the board of governors not to issue permits for foreign investors requesting permission to acquire local lenders.
However, BI Governor, Darmin Nasution, has denied the policy, saying: "We don’t have any policy that limits foreign (investors) for acquisition".
"There is no limitation. Therefore (acquisition) processes could continue," Darmin told reporters at BI headquarters here, the newspaper reported.
Asked on the conflicting comments by the central bank officials, BI
deputy governor Muliaman Hadad, who oversees banking research and regulation, declined to answer.
"Ask Pak Darmin, (I will) have the same answer," he said.
Banking expert, Mirza Adityaswara, said even without an official moratorium, it was legitimate for BI not to issue permits for or delay acquisition requests by investors who wanted to acquire stakes in the country’s banks.
"It is the regulator’s right. The discretion is with the central bank," Mirza told The Jakarta Post.
Malaysia’s Affin Bank backed off from its plan to acquire Bank Ina Perdana earlier this month in light of BI’s ongoing study of bank ownership cap rules.
China Construction Bank is currently in talks to buy stakes in Bank Maspion.
The ruling will limit maximum single ownership in the nation’s banks to below 50 per cent, which will be applied to both local and foreign investors in a bid to support good corporate governance and avoid abuse of power by majority owners in the banking industry.
"The plan to impose such rules has been announced, so investors will need to re-assess their plans and wait and see," Mirza said.
Darmin previously said the rules might be issued this year with a lengthy transition period, which economists said could be at least five years, as investors might have to readjust their shares through divestment, strategic sales, public offerings, or other sales methods.
Indonesia is home to some of the most profitable banks in South-East Asia, given the country’s growing economy.
"Our banks have good prospects, so if (investors) cancel acquisitions, others will be attracted," Difi said.
"We want investors interested in our banks to have good corporate governance and contribute to growing the national banking industry, not just those who seek profits," he added.
Indonesia currently allows investors, including foreigners, to own as much as a 99 per cent stake in local banks, a regulation locally viewed as excessively loose, particularly in the context of foreign investors, as other emerging markets have limits on bank ownership.
Bankers here have complained that the rules provided too many opportunities for foreign investors to expand in Indonesia, while they have suffered difficulties in expanding their businesses overseas.
-- BERNAMA
