Indonesian politicians are contemplating further
restrictions on foreign ownership of domestic financial
institutions. But it is unclear whether the restrictions will
It has been reported that Indonesian politicians are
planning to introduce a new bill to limit foreign ownership of
financial institutions to a 40% stake and require international
banks to establish domestic subsidiaries in Indonesia.
The bill may even require foreign investors with holdings
above the new maximum to sell down their stakes.
That follows a difficult period for foreign investors in the
Indonesian banking market, and it’s unclear
whether the market can sustain even more uncertainty. There
have been few deals since
DBS cancelled its acquisition of Bank Danamon following
But local lawyers were sanguine, observing that even with
the rumoured change of foreign investment caps, the