Indonesian central bank preparing rules to stop single-owner control of banks

15:45, May 30, 2011      

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The Indonesian central bank has prepared regulations that will prevent a single investor from controlling a majority stake in a commercial bank, a move it hopes will stop misuses of power that could result in a collapsed bank, media quoting deputy governor as saying on Monday.

The central bank deputy governor Muliaman Hadad quotd by the Jakartaglobe as saying that the rules would make the banks have better corporate governance.

"We are also pushing banks to go public, one step at a time. The spirit is that we want to improve the governance of commercial banks through more balanced control by their shareholders," Muliaman said.

Muliaman said a 1999 government regulation allowed Indonesians and foreign individuals or entities to own up to 99 percent of a bank.

That regulation, he said, could see a bank become dominated by one shareholder who controls the bank's operations without being supervised by other owners.

Source: Xinhua
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