Dissecting Small Banks’ Strategies to Meet Capital Limit

By Editorial Team 25/01/2021
More capital for banks
Summary

Small banks are still trying to raise additional capital to meet the requirement set by the Financial Services Authority (OJK). OJK Regulation No. 12/POJK.03/2020 on the commercial bank consolidation states that OJK will gradually increase commercial banks' core capital requirement to a minimum of Rp 3 trillion by the end of 2022. However, by the end of this year, they need to have a minimum of Rp 2 trillion capital.

Banks may employ several options to meet the requirement, such as conducting an initial public offering (IPO). PT Bank Fama International is one of the banks that have been planning for an IPO this year. Initially, Bank Fama was going to go public in January 2021 but had to delay it due to the obligation to secure a core capital of Rp 1 trillion before the end of 2020.

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