Incentives planned for bank mergers<\/p>\n
JAKARTA (JP): Minister of Finance Mar'ie Muhammad announced
\nTuesday that the government will offer incentives to encourage
\nsmall banks to merge among themselves or with larger ones.<\/p>\n
\"The Ministry of Finance and Bank Indonesia (the central bank)
\nare preparing the incentives,\" he told reporters after attending
\na plenary session of the House of Representatives (DPR).<\/p>\n
He said that the introduction of the incentives is part of the
\ngovernment's efforts to further improve the operation and the
\nquality of banks in the country. The minister refused to release
\ndetails of the planned incentives.<\/p>\n
\"The success of the banking industry should not only be seen
\nfrom the number of banks, but more importantly from the quality
\nof their services and management,\" he said.<\/p>\n
Sources said that at least 32 small banks have suffered
\nliquidity problems due to their inability to compete in the tough
\nmarket. The competition in the banking industry has become
\nincreasingly fierce since the government introduced banking
\nreform in 1988, which caused a sharp increase in the number of
\ncommercial banks to 234 as of last December from only 112 in
\n1987. The number does not include the more than 5,000 secondary
\nbanks, whose operations are restricted to regencies.<\/p>\n
Early last month, the finance minister threatened to issue a
\nruling to force small banks to merge.<\/p>\n
\"A ruling on the mandatory merging will be enforced if small
\nbanks continue to ignore the government's appeal to unite,\" he
\nsaid. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/incentives-planned-for-bank-mergers-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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