Govt to finance agricultural bank

JAKARTA (ANTARA): The government will provide 70 percent of the about Rp 3.5 trillion (about US$465 million) needed to operate the planned agricultural bank, a minister said.

Minister of Agriculture Soleh Solahuddin said the other 30 percent, or about Rp 1.05 trillion, was expected to come from either local or foreign investors

"We need the Rp 3.5 trillion to meet the minimum capital adequate ratio (CAR) requirement set by Bank Indonesia," Soleh said on Thursday.

He said the government would issue bonds to finance its share in the agricultural bank, which is expected to begin operations early next year.

The minister said publicly listed Bank Duta, which has been appointed to operate the bank, would inject Rp 200 billion into the planned bank.

A government committee recently established to prepare the agricultural bank for operation will seek additional funding from foreign financial institutions, he said.

"The team will seek to establish a cooperation with a French agricultural bank," Soleh said, adding that the committee would travel to France this week to discuss the possible cooperation.

Soleh said two Singapore investors, Minareth Mudharabbath Investment and Megamas Offshore Investment, also had expressed interest in providing $100 million each to finance the agricultural bank. (03)