Foreign banks should argue for exemption from
Indonesia’s central bank plans to limit local bank
ownership according to lawyers in the country.
Bank Indonesia last week announced plans to cut the
stake an individual investor can hold in commercial banks from
99% to 50%. The move aims to improve corporate governance and
strengthen control of local banks. It should also empower
state-owned banks, which are expected to be exempt from the
But in forcing majority shareholders, whether local
or foreign, to sell-down their holdings, the rules could harm
both foreign investment into the country and development of
Indonesia’s banking sector.