Banks allowed links with China

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)