"According to our data, we are optimistic that almost all (banking institutions) could fulfil the Rp3-trillion core capital requirement. I believe that almost all are capable of fulfiling it," OJK's Executive Head of Banking Supervision Dian Ediana Rae stated in Labuan Bajo, East Nusa Tenggara, on Friday.
Speaking after the opening ceremony of the 50th ASEAN Banking Council Meeting in Labuan Bajo, the core capital requirement is a necessity to ensure Indonesian banks survive global economic fluctuations and inter-bank competitions, he remarked.
Institutional consolidation between banks could also help in bolstering Indonesian banking institutions, he added.
"There is no formal (consolidation) yet, but some banking institutions intend to perform the consolidation. We will also encourage consolidation among BPRs (People's Credit Bank)," he stated.
Rae expressed optimism that some of Indonesia's 1,600 people's credit banks would consolidate among themselves, thereby positively affecting the economy in regions where they are active.
"If we shrink it further to promote more consolidations among them, it will be better. We must not forget that BPRs are not small institutions, as some of them are large. We will consolidate them as well," he underlined.
Moreover, the central government will develop business groups for Regional Development Banks (BPD) to bolster the regional banking ecosystem, he remarked.
"(The business groups) will allow BPDs from different provinces to help each other. If the liquidity of a BPD in a region is lacking, then the BPD in other regions could assist," Rae remarked.
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Translator: Sanya Dinda S, Nabil Ihsan
Editor: Rahmad Nasution
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