Banking Industry

Indonesia banking system has steadily achieved substantial progress, a critical precondition for sustainable economic recovery and growth. Rigorous banking restructuring measures, lower inflation and more stable exchange in recent years have contributed to the improvement of the banking sectors.

Major driving factors contributing to the continue improvements are:
More stable macro-economy environment, characterized by stable exchange rate and low inflation.

Success of consolidation within the industry.

Indonesian banking industry has consolidated since 1999 by mergers and acquisitions. International investors have also increased their existence in Indonesia by holding stakes in prominent banks.

Rigorous banking restructuring

Programs have been undertaken. These include recapitalization programs as well as supervisory and regulatory measures complying with international standards.

Indonesian banking sector continues to regain public and international confidence. Foreign prominent players are increasingly holding stake at Indonesia’s major banks, including BCA(Bank Central Asia),Bank Danamon and Bank Niaga. Currently on going divestment program in Indonesia’s recaptilized banks are Bank Negara Indonesia (BN), Bank Mandiri, Bank Tabungan Negara (BTN) and Bank Lippo.

Strengthen the future of banking system

In the banking sector, the central bank of Indonesia (or “Bank Indonesia”) will continue its effort to reinforce the structure of the national banking system and strengthen the intermediary. The effort to improve the soundness of Indonesian banking system encompasses development in financial infrastructure, regulatory and supervisory methodologies.

Improvement of banking infrastructure covering commercial banks, rural banks and Islamic banks.

The policy direction and strategy for commercial banks include improvement in regulation focusing on risk-based supervision, measurement to promote the creation of supporting infrastructure, capacity and institute building, implementation of information technology, and the linkage program. Meanwhile, the development of the Islamic banking policy is set forth in the blue print for development of Shariah banking in Indonesia. The studies conducted by Bank Indonesia include studies of the Islamic banking regulatory framework, and the establishment of the Shariah financial and economic communication center.