Ex Bank Indonesia Governor Darmin Nasution
stated that BI’s controling function had been well undeway where not a single problematic
bank escaped from control. The point was that not a single problematic bak
escaped from control. The point was that not a single bank in this Republic
which escaped BI’s control. This was disclosed by Darmin Nasution on the
occasion of Farewell Reception with the press upon terminating his office at
the BI Building Jakarta on Monday last week [20/5].
Darmin disclosed that he had been improving
control and examination system on banks intensively. Meaning now there were no
longer problematic banks. According to Darmin, there should be no hesitation
about tackling troubled banks in this was done by analyzing the core problem
before trying to find the right solution formula.
Beside controlling the banking sector, there
were other tasks to be accomplished and great challenges to be faced in time to
come but there were high expectations that BI’s new Governor, Agus Martowardojo
could perform hid duties well. As known, Darmin Nasution had completed his
office as Governor of BI on May 22 last and to be succeeded by Agus
Martowardojo who was installed by the Supreme Court of Justice on May 24 last.
One thing was sure the new BI Governor had to
face broad challenges in the future to watch on, among others challenges in the
monetary sector, financial and banking system, and payment system system. All
were related to the real sector, and the domains were interrelated. To meet the
varied challenges, organization wise BI must be flexible, either in making
policies or in coordinating with all stake holders.
On the other hand BI needed to be strong in
dealing with the complexity of problems. In this case BI was called for to
foster collaboration with the government. BI challenges in the monetary sector
was to maintain price stability and Rupiah exchange rate value to ensure
sustainable and inclusive economic growth. This was not easy because there was
capital inflow which was volatile, fluctuative Rupiah value, deficit current
transaction and inflation from volatile foods.
One noteworthy thing was that since early 2012
last the polematics over price thing was that since early 2012 last the
polemacs over price of subsidized oil triggered inflation expectation, and made
Indonesia lose the investment grade rating. On the other hand the worsening
balance of payment and high inflation influenced market players; a condition as
such must be watched on.
Positive response came from the House who
stated their optimism that Agus Martowardojo would be able to fulfill his
commitment to continue policies of BI which had been well underway. The
Parliament did not forget to express their high appreciations to Darmin
Nasution who was rated as having enhanced high performance in BI.
The Parliament rated that under the leadership
of Darmin Nasution BI had succeeded in setting its benchmark. Even in the
discussion with Commission VI of House as BI’s proffessional partner, Darmin
had built firm foundation to issue sound policies. Again they stressed that
BI’s policies were of high quality and properly exercised by BI’s Board of
Governors especially in terms of interest, the reciprocal principle and
financial inclusion.
According to House, the measures taken by
Darmin Nasution in leading BI already respresentedpeople’s aspirations,
including the people’s representative in House. Moreover, many of BI’s policies
were popular and was able to bring positive change to the banking sector in
Indonesia.
In regard to the principal of equity or
reciprocal, it could be homework for the new BI Governor to accomplish the
task. This issue became critical when many BUMN banks wished to expand their
wings overseas, at least in the ASEAN region. Opportunities of BUMN banks were
great in Singapore, provided they were given convenience by the Singaporean
Government to expand their activities.
In a meeting with Commission XI of House
recently, BI started that they suspended permit application for a\acquisition
of 67 percent of Bank Danamont’s capital by DBS Group until the Monetary
Authority Singapore [MAS] make their commitment of reciprocal for 3 BUMN banks
in Singapore.
Darmin Nasution stated that basically BI was
only in a position to permit for acquisition of Bank Danamon by DBS Group 40
percent of total shares based on BI Regulation on shares ownership of banks
released last year. If DBS requested to acquire 67.37 percent, BI needed
discretion or leniency. On that basis BI would also demand leniency to MAS for
3 BUMN banks, i.e. Bank Mandiri, BRI and BNI to be allowed to expand business
to Singapore.
The executives of BUMN banks appreciated BI’s
step to make a reciprocal agreement with Singapore in the case of acquisition
permit for Bank DBS Group and Bank Danamon. However, they also questioned when
BI could demand the same thing to the Malaysia Central Bank. This was related
to the condition where Malaysian banks were free to expand business in
Indonesia, while Indonesian banks trying to expand to Malaysia had to meet hard
pre-requirements.
In case of Singapore, they were basically
protective, but the precondition set forth by BI to MAS when DBS Holding Group
could acquire 67.4 percent of Bank Danamon’s shares was rated by many parties
as appropriate. BI demanded the Singaporean authorities to ease conditions to
Indonesian BUMN banks to operate in Singapore if DBS wished to acquire Bank
Danamon’s shares.
Furthermore there was Bank Mandiri who stated
they wished to get permit to become Qualified Full Branch [QFB] of Singapore
Central Bank [MAS] just as received by foreign banks from Malaysia, India, and
China. Meaning Bank Mandiri was allowed to open at least five branch offices,
open ATM in at least 10 locations which were self stipulated, also allowed to
access retail consumers, allowed to join local ATM network with same pricing as
local banks.
However, Bank Mandiri requested that QFB permit
from MAS must meet the same capital requirement as other banks which were
earlier in operation, not the new standard requirement which was increased
after the DBS transaction was forwarded but stagnated. There should be no
conclusion that MAS was holding back bank expansion from Indonesia to those
countries, then apply new capitalizing regulation which seemed to make it difficult
for Indonesian banks to enter Singapore’s market.
In mid year last year MAS revised QFB
requirement of Singapore. One of the requirements was that QFB must possess
capital of at least 1.5 billion S$ or equal to Rp11 trillion. In regard to the
principle of equity bilaterally, the point was that BI willing to give
discretion, but other countries must also allow equal thing, by prioritizing
national economic interest and stability of national economy.
Such was perhaps some last issues to be
followed up by the new BI Governor Agus Martowardojo. Congratulations, Mr
Martowardojo. (SS).
Business News - May 29, 2013
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