[Kabar-indonesia] Indonesia Eyes Trimming Bloated Banking Sector

[JoyoNews at aol.com]

Indonesia eyes trimming bloated banking sector

WASHINGTON, June 21 (Reuters) - Indonesia has an ambitious blueprint 
to roughly halve the number of banks, creating a tiered system of 
international, national and regional lenders, a senior central back official said on 
Wednesday.

Miranda Goeltom, Bank Indonesia senior deputy governor, said the policy would 
leave Southeast Asia's biggest economy with "three quarters or even half" of 
its current 131 banks -- down from 253 at the time of the 1997 Asian financial 
crisis.

"The timeline is already set ... to start selling off government ownership 
and 
some of the private ones," she said, referring to plans to for ailing banks 
that 
were recapitalized with state funds. She did not specify target dates.

Goeltom, a U.S.-trained economist, told the United States-Indonesia Society 
in Washington that Jakarta aimed to have two or three internationally 
competitive 
banks which were "well capitalized, big enough and well managed."

Below that top tier would be roughly 13 or 15 national banks which were 
"strong enough to compete with each other, well-managed, and with good IT 
(information technology)," she said.

A third lower layer would consist of 20 or 30 banks with a regional focus, 
and a 
fourth layer would comprise small, specialized lenders, Goeltom said. 
Specialized lending, such as for small businesses, could also be handled by branches 
of bigger banks, she added. 

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Joyo Indonesia News Service
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