Banks opened to overseas investment<\/p>\n
JAKARTA (JP): Minister of Finance Bambang Subianto said Monday
\nthat foreign investors would be treated equally with local
\ninvestors in the opportunity to acquire ailing local banks.<\/p>\n
The minister said participation of overseas investors in the
\nrestructuring of the troubled banking sector was essential
\nbecause of the substantial funding required to clear up its
\nproblems.<\/p>\n
\"We will invite foreign investors to participate in the
\nrestructuring of our banks,\" he told journalists following a
\nmeeting with a delegation of Japan's Kansei Economic Federation
\n(Kankeiren) Monday.<\/p>\n
Chairman of Indonesia's Chamber of Commerce and Industry
\n(Kadin) Aburizal Bakrie urged the government last week to
\nprioritize local investors in the purchase of confiscated assets
\nof troubled banks.<\/p>\n
But Bambang said the amount of money to recapitalize the
\nailing banks would be large because the level of nonperforming
\nloans was estimated to reach 50 percent of more than Rp 600
\ntrillion in outstanding loans, equivalent to more than 40 percent
\nof the gross domestic product.<\/p>\n
He told the Japanese delegates the assets would be transferred
\nto the government-sponsored Asset Management Unit (AMU), which is
\nunder the Indonesian Bank Restructuring Agency (IBRA).<\/p>\n
Bambang said the government was revising the country's banking
\nlaw to abolish the foreign ownership limitation for local banks,
\ncurrently set at 49 percent.<\/p>\n
It has also employed international accounting firms to audit
\nlocal banks to ensure foreign investors will have a reliable
\ninformation system in making their judgments, he added.<\/p>\n
The government recently suspended the operation of three banks
\nand took over the shareholding of four others, including the
\ncountry's largest banking institution, BCA, and Bank Danamon, in
\nits first major efforts to rehabilitate the sector.<\/p>\n
The seven banks had received Bank Indonesia liquidity support
\nequivalent to more than 500 percent of their capital. They are
\nbelieved to have channeled 70 percent to 100 percent of the funds
\nto affiliated business groups.<\/p>\n
Bambang said the government's priority was to recover the
\nliquidity support and return the intra-group related lending to
\nthe maximum limit of 20 percent as soon as possible. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/banks-opened-to-overseas-investment-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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