RETAIL BANKING | Cesar Tordesillas, Indonesia

Indonesia wants reciprocity in Singapore operations

Indonesian banks should be given equal treatment in operating in Singapore as a condition for the approval of DBS Bank’s bid for Bank Danamon.


Bank Indonesia deputy governor Halim Alamsyah said that it will seek talks on reciprocity with Singapore.

DBS chief executive Piyush Gupta said he remains “fairly confident” about getting the nod from Indonesian regulators in the next six months.

He added that rejecting the DBS deal could be a big blow to investor sentiment in Indonesia.

DBS said that it will work closely with Indonesian regulators to ensure the process runs smoothly and meets all regulatory requirements.

“Given the way the Indonesian laws are structured, the bank is fairly confident and hopeful that it will receive approval within the second half of the year,” the bank said.

However, the bank is also “mindful of possible headwinds including the issue of reciprocity.”

The Monetary Authority of Singapore noted on Wednesday that there are four Indonesian banks with a presence in Singapore.

Of these four, only Bank Negara Indonesia has a full banking licence. This allows it to offer a wide range of services for retail and corporate clients.

But foreign banks with full banking licences are restricted in how extensive their branch and ATM networks can be.

Of the three other banks, Bank Mandiri operates as an offshore bank while Bank Central Asia and Panin Bank both have only one representative office here.

The MAS spokesman added that ‘all foreign banks are free to expand their activities in Singapore subject to the guidelines specific to the licence under which they operate’.

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