Indonesia extends deadline for single bank ownership

Indonesia will delay an end-2010 deadline requiring investors to own only a single bank.

This will give the Indonesian government more time to work out what to do with its stakes in four banks.

The policy, originally set for 2008 but pushed back several times already, forced Singapore state fund Temasek to sell a stake in one of its two banks in

Indonesia, and could bring about management changes at state-owned banks, officials have said.

The government owns controlling stakes in four major banks, including 66 percent of Bank Mandiri, 56 percent of Bank Rakyat Indonesia, 76 percent of PT

Bank Negara Indonesia and 73 percent of the recently listed PT Bank Tabungan Negara.

The policy from the central bank requires all banks that share a major shareholder to merge, divest or create a single holding company.

Said Didu, secretary of the state enterprises ministry, did not give a new deadline for the policy, which aims to consolidate the banking sector and help improve transparency.

Didu said the government had to make the right moves over state-owned banks because any wrong decision could affect the banking system and the economy.


The full story can be read at Reuters.com