Indonesia Needs To Reduce Number Of Banks

Jakarta (antara Bali) - The Indonesian government needs to reduce the number of banks to improve their competitiveness in the face of ASEAN Economic Community (AEC) to be launched on December 31, 2015, an economist said.

"To date, Indonesia has 119 banks. The number is too large and should be reduced to 20," A Tony Prasetiantono said at a discussion here on Wednesday.

Singapore now only had three banks but they were all world-class, while Malaysia had eight banks to serve its 30 million population, he said. The characteristics of banking business which were different from those of other sectors also required banks to have strong capital, he said.

"A bank will find it hard to expand its business if it does not receive fund injection to channel credits," he said.

Mulya Siregar, deputy commissioner of the Financial Service Authority (OJK) for banking supervision, meanwhile said to be competitive, banks needed to anticipate risks. To maintain the stability of the banking industry, OJK would intensify integrated supervision of banks, he said.

Economist Firmanzah who is also rector of Paramadina University agreed that the national banking industry needed to be strengthened. (WDY)