Banking Industry Ready To Face AEC: Bank Indonesia

Makassar, S Sulawesi, Dec 30 (Antara) - Deputy chief of representative of Bank Indonesia for South Sulawesi Causa Iman Karana said Indonesian banking industry already took the necessary steps to face ASEAN Economic Community (AEC) to be implemented late 2015. "The central bank has classified banks by their core capital strength to face competition at regional level," Causa said here on Tuesday. Bank Indonesia has divided banks into four categories -- category I are banks with capital less than Rp1 trillion, category II those with capital of Rp1 trillion and larger but not up to Rp5 trillion, category III of Rp5 trillion and larger but not up to Rp30 trillion, and category IV with capital of Rp30 trillion and larger. The size of capital will determine the type of banking business they could operate, Causa said. "If financially they are not strong enough, their business range would be limited, that in the event of problem the impact would also be limited," he said. In term of human resources, Indonesia is no less competitive as the banking industry already applied certification system of recruitment, he said. "We are also ready to face global competition in human resources. So is in information technology," he said. Indonesian state lender, Bank Rakyat Indonesia (BRI), is even the first bank in the world to have a satellite, he said. Meanwhile, N. Ikawidjaja, a commissioner of Bank Sulsel, which is owned by the provincial administration, said the Financial Service Authority (PJK) and Bank Indonesia already prepared a master plan including consolidation and banking acquisition ahead of the implementation of AEC. "It is almost certain that two years from now or at least until 2020 , there would be big mergers and acquisitions," he said , adding, what is important for banks is to maintain a strong market base. "We already have strong market base notably in the small and medium business sector. Even foreign banks appreciates it<" he said. Some observers, including the National Banking Association (Perbanas), however, are not satisfied with the preparations made by the government. They suggested that the government create a giant bank through merger of state lenders such as Bank Mandiri and Bank Negara Indonesia (BNI) to face competition in the region after the implementation of AEC. They said Malaysia already has a world class state lender through merger of state banks.