OJK Signals Need for Mergers Among Small-Scale Banks
The Financial Services Authority (OJK) is once again pushing banks within the KBMI I group—those with core capital ranging from Rp3 trillion to Rp6 trillion—to upgrade their scale.
OJK Executive Head of Banking Supervision, Dian Ediana Rae, views the strengthening of KBMI I banks as part of a strategic agenda that must be pursued in a directed and prudent manner. The goal is to bolster the structure and resilience of the national banking sector and support sustainable economic growth. This step is considered vital, particularly considering the dynamics of information technology developments, the acceleration of banking digitalisation, global economic uncertainty, and the rising risk of cyberattacks.
“In this regard, OJK deems it necessary to encourage sustainable bank growth,” Dian stated in a release on Monday.
OJK assesses that KBMI I banks still have room to strengthen their capital and increase their business scale through both organic and inorganic strengthening measures. Dian noted that the authority had previously issued an appeal for fundamental strengthening and consolidation to small-scale banks at the end of October 2025.
OJK has subsequently urged every KBMI I bank to conduct a thorough and continuous evaluation of business performance, capital, asset quality, governance, business models, and long-term prospects. This includes identifying options for capital strengthening and consolidation opportunities that suit the specific characteristics of each bank.
Furthermore, Dian mentioned that merger actions could be undertaken by small-scale banks that are experiencing stagnant performance. However, she noted that such a move requires a visionary outlook from controlling shareholders (PSP).
“An inorganic approach through consolidation is necessary to provide a boost to the performance of banks deemed to be experiencing stagnation. This certainly requires honesty and a visionary attitude from the PSP and bank management to assess future performance prospects based on their current capital position and performance,” Dian said.
Additionally, since December 2025, OJK has been inviting KBMI I banks to participate in focus group discussions (FGD) to develop a roadmap. Dian emphasised that the current appeal for fundamental strengthening and consolidation of KBMI I banks will be evaluated periodically to monitor the level of success.
Simultaneously, OJK is preparing the most appropriate policy framework and mechanism to ensure that the capital strengthening of KBMI I banks can proceed prudently, measurably, and sustainably. Dian noted that the preparation of these policies considers financial system stability, customer protection, and the continuity of intermediary functions, ensuring that implementation is not rushed and remains aligned with the capacity of each bank.