New Rule by BI asks Overseas Banks to Open Limited Liability Companies in Indonesia
Bank Indonesia thinking about introducing new procedures that will require all the overseas banks working in the country to set up a limited liability company incorporated in Indonesia. Muliaman Hadad, a deputy governor at the central bank, said "The mutual rule will be implemented. We would be directing foreign bank branches to establish limited liability companies in Indonesia." Some of the banks have complained that they cannot open liability companies and branches overseas due to regulatory barriers established by foreign central banks.
Indonesian commercial banks such as Bank Mandiri and Bank Negara Indonesia cannot do the same overseas. The plan of Bank Mandiri to open a new full-fledged branch in Malaysia has been postponed as they required having some amount of capital before it can operate as a commercial bank there.