Indonesia's national bank has announced that companies may only own stakes in one lender in a move aimed at consolidating the country's banking industry.
The Bank of Indonesia has told firms that own stakes in more than one bank that they must reduce their holdings, merge the banks or set up a holding unit. The new rule will apply to controlling shareholders, or those with a stake of more than 25%. Consolidation must be completed by the end of December 2008, the bank said.
Bloomberg reported that Singapore’s Temasek is one lender likely to be affected by the policy, as it has a stake in Bank Danamon, Indonesia’s fifth largest lender and in Bank Internasional Indonesia, the nation’s sixth largest bank. The national bank did not say when the regulation would come into force.
Bank Indonesia wants the country’s 131 banks to merge into fewer, bigger lenders to strengthen the financial sector. The ruling is expected to prompt mergers between smaller banks majority owned by the same shareholder.