Indonesia’s central bank announced new regulations limiting bank ownership to 40 percent. The new rules limit ownership of new acquisitions by financial institutions to 40 percent, non-financial institutions to 30 percent and families or individuals to 20 percent, said Mulya Effendi Siregar, an executive director at Bank Indonesia (BI), the country’s central bank
“The ownership of commercial bank shares will apply to foreign and domestic banks to improve the health of banks,” he said. The bank said on its website that under new rules, financial institutions can own more than 40 percent of a domestic commercial bank only under specific criteria and approval from BI. BI said the rules went into effect on July 13, and that state-owned banks and banks undergoing recovery are exempt. The new rules replace regulations that allowed local and foreign investors to own up to 99 percent of Indonesian banks. Perhaps there is an increasing trend towards protecting strategic assets of the country. This announcement comes at a crucial period, taking into account the run-up to the 2014 Presidential elections.