Indonesia to question DBS on Danamon transaction

The Indonesian central bank is set to discuss with the DBS Group about its plan to buy 99 percent of Bank Danamon shares.

“We will ask what they will do and about their intentions,” said BI deputy governor Muliaman Hadad, who added that it is part of the standard operating procedure.

Hadad said he would also raise the need of reciprocal cooperation, wherein greater access could be given to Indonesian banks to establish branch offices in Singapore.

DBS had prepared US$7.2 billion to buy 99 percent of shares in Bank Danamon, with the aim of creating Indonesia’s fifth-largest lender by assets. Both banks are owned by Temasek, an investment fund controlled by the Singaporean government.

“If Bank Danamon is owned by DBS, a banking company which is monitored by a regulator, we can implement cross border supervision. We can share information with its [Singapore’s] banking regulator. But first, we want to talk with DBS,” added Hadad.

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