Consolidating Indonesia's Banks

Indonesia''s central bank aims to reduce the number of lenders in the nation by half.

Analysts say the pressure is on small Indonesian banks to merge with their bigger brethren, now the government has outlined its criteria for selecting anchor banks in an effort to strengthen the financial industry.

On June 30 the central bank, Bank Indonesia, announced its criteria for selecting anchor banks, which will help reduce the number of overall lenders from 132 to 70. But analysts are critical of some parts of the plan.

Eligible anchor banks will be those that, in the past three years, have continuously recorded a core capital of over Rp100 billion $10.1 million, a capital adequacy ratio of 12%, and NPL non...

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