Indonesia lifts ban for most banks to seek new wealth clients

JAKARTA, June 1 (Reuters) - Indonesia's central bank has lifted a one-month ban on most banks from seeking new wealthy customers as expected, but several banks are still suspended from recruiting clients after failing to comply with central bank findings.

The ban will be lifted on June 3, Bank Indonesia said in a statement on Wednesday, after investigating wealth management services in top banks operating in the country, following fraud at Citibank Indonesia and alleged fraud at Bank Mega in the past two months.

Bank Indonesia, also the banking regulator, has said it plans to implement anti-fraud measures and strengthen customer protection, after imposing tough sanctions on Citibank and Mega. [ID:nL3E7GA0NW]

"Banks that haven't responded to Bank Indonesia findings and still have weaknesses in policy, system and procedure, as well as internal supervision, are still forbidden to add new customers for priority banking or wealth management until they conduct necessary improvements," said spokesman Difi A. Johansyah.

"This decision is taken to push banks to keep improving the quality of service, security and protection to customers."

Bank Indonesia did not name the banks that are still suspended. Some banks that have not managed to examine all their branches that provide wealth management services can only recruit new customers in branches that have already been inspected, the central bank said. (Reporting by Aditya Suharmoko; Editing by Neil Chatterjee)