Banks allowed links with China

JAKARTA (JP): Indonesian banks face no barriers in establishing correspondent relationships with banks in China, according to a central bank official.

Bambang Setiyoprodjo, the head of Bank Indonesia's division for law and secretariat affairs, said that domestic banks are allowed to become correspondents of Chinese banks.

"The correspondent ties can be in the form of depository or non-depository relationships," he told Antara in his response to exporters's complaints about the lack of banking facilities for trade activities with China.

Exporters said recently that the restrictions imposed on local banks to set up correspondent relationships with Chinese banks impeded their export activities because with such a policy, the banks could not issue letters of credit for exports to China.

Bambang acknowledged yesterday that the central bank once imposed such a restriction but lifted it in 1985 as part of the government's deregulatory measures in the financial sector introduced in October of that year.

A number of local businesspeople will hold a five-day trade exhibition next week in Beijing, the first Indonesian trade expo staged in China since the country's normalization of diplomatic relations with Indonesia in 1990.

The exhibition, to be held on Sept. 26 to Sept. 30, is being organized by PT Indo Asean Persada in cooperation with Chinese state-owned companies. (hen)