{
    "success": true,
    "data": {
        "id": 1833184,
        "msgid": "issue-of-three-foreign-banks-repatriating-profits-draws-scrutiny-here-are-the-facts-1782845412",
        "date": "2026-06-30 23:30:39",
        "title": "Issue of Three Foreign Banks Repatriating Profits Draws Scrutiny, Here Are the Facts",
        "author": " ",
        "source": "GALERT",
        "tags": "",
        "topic": "Economy",
        "summary": "Social media discussions have highlighted the repatriation of profits by three foreign banks operating in Indonesia, framing it as detrimental. While the practice is a standard part of foreign direct investment, the scale of outflows has prompted public debate about whether the benefits to the Indonesian economy outweigh the profits sent abroad.",
        "content": "<p>The issue regarding three foreign banks allegedly withdrawing profits\nabroad since 2024 has become a topic of discussion on social media. The\nnarrative describes this practice as detrimental to Indonesia. However,\nthe remittance of profits by foreign banks to their headquarters is a\ncommon practice in the investment world, provided it is conducted in\naccordance with applicable regulations.<\/p>\n<p>The three banks under scrutiny are Citibank, HSBC, and Standard\nChartered. All three are foreign banks operating in Indonesia through\nbranch offices; therefore, profits earned after fulfilling tax, capital,\nand regulatory obligations can, in principle, be sent to their\nheadquarters or shareholders in their home countries.<\/p>\n<p>Nevertheless, the amount of repatriated profit has drawn public\nattention as it is perceived to indicate an outflow of earnings from\nIndonesia. On the other hand, regulators continue to supervise banking\noperations to ensure they comply with the regulations of the Financial\nServices Authority (OJK) and Bank Indonesia, including matters related\nto capital adequacy and financial system stability.<\/p>\n<p>Economically, profit repatriation is an inseparable part of Foreign\nDirect Investment (FDI). According to the FDI theory developed by John\nDunning through the Eclectic Paradigm (OLI Theory), foreign investors\ncommit capital to a country with the aim of generating profit.\nConsequently, investors have the right to bring those profits home after\nfulfilling all legal obligations in the country where they invest.<\/p>\n<p>Therefore, profit repatriation is neither an illegal practice nor\nsomething that has only begun occurring in 2024. Almost all\nmultinational corporations in various countries employ similar\nmechanisms, including Indonesian companies that have investments\nabroad.<\/p>\n<p>However, from a development economics perspective, the metric is not\nmerely the volume of outgoing profit, but whether the benefits of the\ninvestment received by Indonesia outweigh the profits taken home by\ninvestors. Economist Joseph Stiglitz explains that foreign investment\nprovides benefits if it is capable of creating jobs, increasing\nproductivity, expanding access to finance, paying taxes, and encouraging\nthe transfer of technology and expertise.<\/p>\n<p>Conversely, if the repatriated profits are significantly larger than\nthe value added generated for the domestic economy, the benefits of the\ninvestment may be questionable. Therefore, the government\u2019s challenge is\nnot to prohibit the remittance of profits, but to ensure that foreign\ninvestment generates greater value added for the national economy.<\/p>\n<p>Thus, the narrative that three foreign banks are \u201cwithdrawing profits\nabroad\u201d does indeed have a factual basis. However, concluding that this\npractice is automatically detrimental to Indonesia or is a new\nphenomenon since 2024 is not entirely accurate. Profit repatriation is a\nstandard practice in the global investment system, while its benefits or\nlosses depend heavily on the extent of the investment\u2019s contribution to\neconomic growth, job creation, tax revenue, and the strengthening of the\nnational financial sector.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/issue-of-three-foreign-banks-repatriating-profits-draws-scrutiny-here-are-the-facts-1782845412",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}