BI To Introduce Multi-Licence System For Banks

Jakarta (Antara Bali) - Bank Indonesia will soon implement a multi-licence system for banks in order to improve the national banking industry, according to the central bank's governor, Darmin Nasution.

"As the system has so far been effective in several other Association of Southeast Asian Nations (ASEAN) countries, it is now time to implement the policy," he said here on Thursday.

The new system involves regulation of bank capital, governance by limiting holdings, licensing of bank activities and products, and licensing requirements for the opening of bank offices.

Darmin said banks in several countries were required to adjust the coverage of their products and activities according to their grouping. The banks also needed to have a licence to develop and use certain products or carry out specific activities.

So a bank that wishes to continue with its present products and activities as per its coverage must cover its capital shortage within a specified period.

Darmin noted the regulatory improvement did not mean the national banks had met the ASEAN Banking Integration targets for 2020, because a lot of things had yet to be in place, especially with regard to operational competitiveness.(*/T007)