IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 13 Jul 2012 | Removal date: open ended
Still in force

FDI: Entry and ownership rule

On 13 July 2012, the Bank of Indonesia issued regulation 14/8/PBI/2012 regulating share ownership of commercial banks.
The new provisions introduce foreign ownership caps on banks of 40% (art. 2(2)a of the regulation), unless a number of conditions are met. These include getting a special approval from the Bank of Indonesia, the bank having to offer at least 20% of its ownership to the public within 5 years after the takeover amongst other conditions.
Furthermore, article 5(2) of the regulation requires foreigner or foreign companies to:

  • 'a. be committed to supporting the development of the Indonesian economy through the owned bank;
  • b. obtain a recommendation from the supervisory authority of the country of origin, in the case of a legal financial entity; and
  • c. to be rated at least as follows:
  • i. 1 (one) notch above the lowest investment grade, in the case of financial legal entities;
  • ii. two (2) notches above the lowest investment grade, in the case of a financial legal entity which is not a bank
  • iii. three (3) notches above the lowest investment grade, in the case of non-financial legal entities.' (own translation)

The regulation came into force on the day of its issuance.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

Please report this page in case you detect an inaccuracy in its content.