OJK's Ammunition to Force Mergers and Acquisitions in Banking Sector

By Editorial Team 20/01/2020
Summary

Banks' minimum core capital will be increased to US$ 220 million or Rp 3 trillion. This regulation aims at accelerating consolidation in the banking sector and increasing competitiveness with strong capital. The Financial Services Authority (OJK) Banking Supervisor Chief Executive Heru Kristiyana said banks, two years ago, had been encouraged to strengthen their finances to be more competitive so that they could contribute more to economic growth.

According to OJK's plan, the new rule will be issued in late January or early February 2020. The imposition of this minimum capital regulation will run gradually. The minimum capital will increase to US$ 73.3 million (Rp 1 trillion) in 2020, US$ 146.6 million (Rp 2 trillion) in 2021, and US$ 220 million (Rp 3 trillion) in 2022.

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