Logo Home    |    About us    |    Practice areas    |    Lawyers    |    News    |    Join us    |    FAQ
Tiendas Law Offices | News
Do you want to receive our publication regularly? Subscribe here



Do you have a testimonial about us?
Write here or view here


    

News

OJK TO RELAX RULES FOR FOREIGN INVESTORS

Posted on August 22, 2015 on 09:38:39 WIB


The Financial Services Authority (OJK) plans to ease restrictions imposed on foreign investors entering the country's banking industry if they wish to venture into sharia banking, the agency's senior official has said.

OJK commissioner for banking supervision Nelson Tampubolon said in Jakarta on Thursday the agency was preparing several measures in its attempt to boost the penetration of sharia banks in the country's banking system.

The measures would include the removal of a requirement that obliges a foreign investor to take over at least two lenders, he said.

In order to support the consolidation of Indonesia's crowded banking industry, the OJK has encouraged foreign banks to take over small and medium-sized banks, albeit with strict requirements. For example, a foreign investor must take over two banks at once, so that they can be merged into a bigger bank.

"But if they want to convert existing commercial lenders into sharia ones, they can do so by purchasing one bank only. It seems that many are interested in this offer," he said.

Among those interested are Malaysian, Middle Eastern and Papua New Guinean investors. However, Nelson said the OJK would prioritize countries with which the regulator had already signed a memorandum of understanding on financial supervision.

Malaysia is not exempt from the waiver, even though the OJK has previously claimed that the penetration of Malaysia-based banks in Indonesia's banking industry is already quite high. "Their penetration accounts for around 7 percent already, but the door is still open for them to enter the sharia segment. We're fine with that," Nelson said.

Malaysia's Affin Bank Berhad is among the foreign investors that have already revealed an interest in entering Indonesia's sharia banking industry.

The bank had planned to acquire small lender Bank Ina Perdana and convert it into a sharia lender, but it scrapped the plan amid talk of a foreign-ownership cap back in 2012, when banking supervision was part of Bank Indonesia's (BI) responsibilities.

At present, Indonesia boasts 118 commercial banks, the highest number in Southeast Asia. On the other hand, there are only 12 stand-alone sharia lenders and 10 sharia units within several commercial banks.

In terms of assets, the sharia banks only controlled Rp 269.47 trillion (US$20.2 billion), equal to 4.6 percent of the assets in the commercial banking industry in April, according to latest banking statistics.

As many as 10 lenders currently have a core capital below Rp 2 trillion each and the remaining two lenders have a core capital of between Rp 2 trillion and Rp 5 trillion each.

However, one condition remains for any investor, according to Nelson. "The investors must be committed to injecting funds into the acquired banks to boost their capital to at least Rp 5 trillion. They will then have sufficient capital to expand their business and drive sharia penetration to over 5 percent," he said.

Meanwhile, Achmad K. Permana, the secretary-general of the Indonesian Sharia Banks Association (Asbisindo), said that it welcomed the OJK's initiative.

He said that several potential foreign investors had consulted the association regarding business prospects and that many of them hailed from the Asian region.

"For foreigners, Indonesia still offers lucrative business prospects. We have the highest Muslim population, but low banking penetration. There are many things to be developed here," he said.

However, Permana insisted that other changes were still needed to improve sharia banking, which he said was still "in its infancy."

"Lower taxes for sharia products and the obligation to keep haj funds in sharia banks could assist us in nursing the business," Permana said.

Source : The Jakarta Post dated 19 June 2015


Other News

- GOVT RELAXES PERMITS FOR POWER PLANT INVESTORS
- BKPM MULLS PLAN TO EASE FOREIGN OWNERSHIP IN COLD-STORAGE FACILITIES
- OJK TO REGULATE CROWDFUNDING BY YEAR-END
- GOVT TO ISSUE REGULATION ON MINING COMPANIES' DIVESTMENT
- EXIMBANK SECURES $500M LOAN FROM ICBC
- BRI SIGNS LOAN DEAL WITH PETROKIMIA GRESIK
- POLICY ISSUED TO EASE RESTRICTIONS ON FOREIGNERS' BANK ACCOUNTS
- GOVT TO ALLOW EARLY MINING LICENSE EXTENSION
- GOVT TO SIMPLIFY EXTENSIONS OF MINING CONTRACTS
- RESTRICTIONS ON FOREIGNERS' BANK ACCOUNTS EASED
- INDONESIA'S CENTRAL BANK TIGHTENS RULES FOR DOMESTIC DOLLAR PURCHASE
- BRI, BNI READY TO BUY BACK SHARES: MINISTER
- OJK WARNS BANKS OF HARD TIMES, FALLING CAPITAL
- ADIRA MULLS OFFERING LOANS TO GO-JEK, GRABBIKE DRIVERS
- OJK WANTS SMALL FOREIGN-OWNED BANKS TO UPGRADE CLASS
- 10 COAL MINERS AGREED TO AMEND OPERATING CONTRACTS
- ECONOMY IN BRIEF: OIL AND GAS FIELDS UP FOR AUCTION
- GOVT EXTENDS DEADLINE ON EQUITY RULING
- GOVERNMENT CONSIDERS REVISING OIL SHARE CONTRACTS
- OJK'S NEW POLICIES EXPECTED TO STOKE LENDING
- CREDITOR STARTS BANKRUPTCY PROCEEDINGS AGAINST INDONESIA'S BERAU
- MNC INVESTAMA TO BUY BACK 10% OF PUBLIC STAKE
- BII TO DISBURSE $300 MILLION LOANS IN SECOND HALF
- OJK IMPOSES RELAXED RULINGS TO REFINE LENDING
- BKPM TO PUSH REALIZATION OF 54 FDI PROJECTS WORTH $13.6 BILLION
- FOREIGN BANKS PROTEST BILL REQUIRING LOCALLY INCORPORATED BRANCHES
- FOREIGN LENDERS FRET OVER PROPOSED LIMIT
- GOVERNMENT TO SIGN REVISED MINING CONTRACTS THIS MONTH
- NATIONAL HEALTH INSURANCE (JKN) PENALTIES INCREASED, FEES RAISED
- SOUTH KOREAN SHINHAN BANKS BUYS INDONESIAN BANKS
- HEAVY SANCTIONS IMPOSED AGAINST DOLLAR TRANSACTIONS
- GOVERNMENT TO EXPAND CORPORATE TAX DISCOUNTS
- BCA EYEING A CREDIT BUREAU TO BOLSTER LOAN, TACKLE NONPERFORMING LOANS
- INDONESIA REGULATOR TO ISSUE RULES TO MANAGE RISK AT FINANCIAL CONGLOMERATES
- FOREIGN POSSESSION OF PROPERTIES CAN LAST A LIFETIME: MINISTER
- NEW UN REPORT FINDS INCREASE IN FOREIGN INVESTMENT FOR INDONESIA IN 2014
- BKPM'S RESPONSE TO INVESTORS CALM OVER WEAK RUPIAH
- ANALYSIS: BANKS: PRESSURED BY TAX RULINGS
- GOVT TO FINISH COAL TALKS BY END OF YEAR
- BANKS PLAN ON LOWERING TARGETS IN RESPONSE TO COOLING ECONOMY
- PALM-OIL LEVY COLLECTOR TO BE ESTABLISHED NEXT WEEK
- WORLD COAL MARKET HEADING TO NEW EQUILIBRIUM: MINISTER
- BI REVISES RULES TO BOOST FX TRADING, SWAP DEALS
- BKPM SOLVES INVESTMENT BOTTLENECKS WORTH US$99 BILLION
- INDONESIA TO ISSUE NEW TIN RULES TO STOP ILLEGAL EXPORTS
- GOVERNMENT REVISES INVESTMENT TREATIES
- RI TO RESUME FREE TRADE TALKS WITH EU NEXT MONTH
- WINTERMAR SEEKS TO EXPAND OVERSEAS
- KADIN PROPOSES SPECIAL FUNDING BODY TO SUPPORT INDUSTRY
- INDONESIA HIRES FOUR BANKS TO MANAGE NEXT GLOBAL SUKUK
- INDONESIA PRESIDENT SIGNS PALM EXPORT LEVY TO FUND BIODIESEL
- BKPM TO ISSUE PROCEDURES FOR APPLYING FOR TAX ALLOWANCES
- OJK PLANS NEW REGULATION TO BOOST VENTURE CAPITAL INDUSTRY
- BI EASE THE RESTRICTION UPON BANK’S LOAN DEPOSITO RATIO
- BI TINKERS WITH RULES OF BANK TO EASE POLICY
- TAX AMNESTY ENFORCED ON 2017
- FACING MEA, OJK STRENGTHEN THE SAFE GUARD OF FINANCIAL SECTOR
- MINISTER OF FINANCE STRATEGY TO HOLD THE OUTFLOW OF FOREIGN CAPITAL
- OPPORTUNITY KNOCKS AT ASIA-AFRICA SUMMIT
- BKPM REFORMS LEAD WAY TO ASEAN INVESTMENT
- INDONESIA'S CENTRAL BANK BANS FOREIGN CURRENCIES FOR DOMESTIC TRANSACTIONS
- MINISTER OF TRADE SET A SPECIAL PROVISIONS MANDATORY L / C
- OJK BANS PARTY MEMBERS FROM BANK LEADERSHIP
- FED MOVE GIVES RI TIME TO REFORM
- BKPM ANNULS $23 BILLION IN INVESTMENT PERMIT
- MOF OF INDONESIA TO REDUCE FOREIGN OWNERSHIP AGAINTS RUPIAH BOND
- NEW VISA POLICY TO AID RUPIAH
- INDONESIA REGULATOR TO EASE INVESTMENT RULES ON PENSION AND INSURANCE FUND
- INDONESIA TO IMPOSE ANTI-DUMPING IMPORT DUTIES TO STRENGTHEN RUPIAH
- INDONESIA PLANS ALTERNATIVE SUKUK STRUCTURES TO BOOST VOLUMES
- INSIGHT: HOW SHOULD WE MEASURE EXPATS' INDONESIAN PROFICIENCY?
- GOVT TO PLACE SOE SUBSIDIARIES UNDER CLOSE SCRUTINY
- MANDIRI TO SET UP VENTURE CAPITAL, SEEKING EXPANSION BEYOND BANKING
- CONTRACTORS TOLD TO CUT COSTS BUT KEEP OUTPUT UP
- OJK TELLS BANKS TO BE VIGILANT AS BAD LOANS RISE
- LPS IN FRAME FOR NEW ROLE OF PROTECTING INSURANCE COMPANIES
- GOVT LOOKS TO HONE MARITIME DEVELOPMENT
- GOVT TO EASE PERMITS FOR OIL & GAS SECTOR
- 2015, YEAR OF SHARIA CAPITAL MARKET: OJK
- FOREIGN OWNERSHIP CAP, DIVESTMENTS LOOM IN REVIVED BANKING BILL
- NEW NCD, LDR RULES TO HELP BANKS
- OJK TO LET INDONESIA MUTUAL FUNDS TO INVEST ABROAD
- BANK INDONESIA IMPROVES THE REGULATION ON APPLICATION OF PRUDENCE IN NON-BANK CORPORATE EXTERNAL DEBT MANAGEMENT
- LAND ACQUISITION AND PPP RULES TO BE REVISED
- BI RATE KEPT STEADY; NO SIGN OF RATE CUT IN NEAR FUTURE
- BKPM TO FACILITATE MORE INVESTMENT IN PETROCHEMICAL, PHARMACEUTICAL AND STEEL
- 4 STRATEGIC EXPORT PRODUCTS REQUIRES L/C
- UOB FACILITATES INVESTORS IN RI
- BKPM TO TRIAL NEW LICENSING SYSTEM IN MAJOR PROVINCES
- BANKS UPBEAT ON INVESTMENT WORKING CAPITAL LOANS
- FOREIGN WORKERS IN INDONESIA 'MUST TAKE LOCAL LANGUAGE TEST'.
- TRADE MINISTRY HAS ISSUED NEW REGULATION REGARDING EXPORT-IMPORT OF OIL AND GAS.
- BI DELAYS NEW POLICY ON BANK DEPOSITS
- BI TO PROMOTE E-MONEY TRANSACTIONS IN 2015
- NEW INDONESIAN REGULATION MAY BOOST GROWTH FOR MULTIFINANCE FIRMS IN 2015
- CLEARING THE WAY FOR LOCAL BONDS
- IMPROVING CORPORATE GOVERNANCE SEEN AS KEY FOR FURTHER FOREIGN INVESTMENT IN INDONESIA
- US EASES VISA PROCESS FOR RI CITIZENS
- GENERAL ELECTION TO BOOST RUPIAH
- INCENTIVES OFFERED FOR EXPORT-ORIENTED INVESTMENT
- NEW REGULATION TO EASE DELISTING OF IDX COMPANIES
- INDONESIA'S TRADE MINISTER RESIGNS TO FOCUS ON PRESIDENTIAL CAMPAIGN
- NEW TRADE LAW EXPECTED TO BOOST DOMESTIC PRODUCTION IN INDONESIA
- MINISTRY ISSUES LAW ON GOVERNMENT OFFICIALS
- 2014: FDI ESTIMATED TO CLIMB 15%
- CAPITOL NUSANTARA PLANS TO PURCHASE $6M VESSEL BY JULY WITH IPO PROCEEDS
- SHIPPING INDUSTRY SET TO SAIL IN STORMY SEA THIS YEAR
- MANDIRI SETS ASIDE $822M FOR ACQUISITIONS
- OCBC NISP EYES RP 3T IN 2014 BOND SALE
- LOGINDO MAKES FLAT STOCK MARKET DEBUT
- LOGINDO SETS $64M TARGET IN CONTRACTS
- PRESIDENT PROMISES SWIFT FINALIZATION OF REVISED DNI LIST
- CHINA TO BUILD SHIPYARD IN INDONESIA
- ENGLISH LANGUAGE CONTRACT DEEMED VOID BY INDONESIAN COURT
- INDONESIA PLANS TO SOFTEN FOREIGN MINERS' DIVESTMENT RULE
- NEWMONT GOLD MINE WORKERS IN INDONESIA START STRIKE
- BI MAY USE 'LDR' POSITION TO INCREASE BANK LENDING
- MINISTER: TREND IN EXPORT GROWTH UP
- US, INDONESIA TO EXPAND BILATERAL COOPERATION
- NINE INDONESIAN AIRLINES FINED BY KPPU
- INDONESIAN STOCKS SOAR TO BIGGEST GAIN SINCE DECEMBER 2008
- NEW FINANCE MINISTER TO CONTINUE EXISTING FISCAL, MONETARY POLICIES
- UP TO 49% FOREIGN CAPITAL TO BE ALLOWED IN CROP CULTIVATION ENTERPRISES
- ASEAN TRADE IN GOODS AGREEMENT (ATIGA) TAKES FORCE
- TELECOMMUNICATION TOWERS CLOSED TO FOREIGN INVESTORS
- STANDARDIZATION FAILS TO PROTECT DOMESTIC INDUSTRY: LAWMAKERS
- BI, BAPEPAM TIGHTEN UP RULES
- KRAKATAU STEEL TO CONDUCT IPO IN SEPTEMBER 2010
- TELKOM LOOKS TO ACQUIRE SMALLER TELCOM FIRMS
- DUBAI'S FALLOUT MAY HIT RI FIRMS
- RI'S Q3 FOREIGN INVESTMENT INFLOWS PLUNGE 87 PCT
- LPS GETS BOOST FROM PPATK TO HELP TRACE LOST ASSETS
- BANK INDONESIA TO RESTRICT FOREIGN OWNERSHIP
- THAI PTT PLANS COAL MINE INVESTMENT IN INDONESIA
- BKPM TO MINIMIZE COMPLEXITY IN LICENSING