TEMPO.CO, Jakarta - The Financial Services Authority (OJK) will ease the rule on banks' single presence policy. This is aimed at trimming down the number of banks in Indonesia, as well as to speed up the process of consolidation in the domestic banking sector.
The old rule, stipulated in OJK's Regulation no.39/POJK.03/2017, mandates a merger when big banks acquire smaller ones, since they will have the same owners. It asserts that one entity may only have control over one bank.
That rule, OJK deputy for banking supervision Budi Armanto says, is not very flexible for fast-tracking consolidation.
Therefore, the OJK is offering leeway for large banks that are planning to acquire small banks. "They don't have to merge," he said, as there is now an option to turn the small banks into special satellite banks.
"Just like sharia banks; you don’t have to merge it even though the ownership is the same as the conventional one," Budi remarked.