Bank Ownership limited by new BI Regulation

Editorial Team

Bank Indonesia Regulation No. 14/8/PBI/2012 on Commercial Bank Ownership (“Regulation”) introduces a cap on individual shareholder ownership in a bank. The Regulation was issued as part of BI’s effort administer good corporate governance in the banking industry by preventing or otherwise breaking up concentrated ownership (see Regulation recital).

The Regulation only concerns commercial banks (Law No. 7/1992 as amended by Law No. 10/1998) and sharia banks (Law No. 21/2008). Rural banks do not fall within its scope (Art. 1 (1) of the Regulation) and the share-ownership capping does not apply to Central Government (Art. 3), meaning banks such as BNI, BTN, and BRI may be 100% government-owned.