JAKARTA Dec 5 Indonesia's central bank has
imposed higher capital adequacy requirements for some commercial
banks, in its latest policy effort to increase the stability of
the financial system in Southeast Asia's largest economy.
The new rule, issued on Nov. 28 and coming into force in
March 2013, requires banks to maintain a capital adequacy ratio
of between 8 and 14 percent depending on their risk profile,
from a current flat requirement of 8 percent, Bank Indonesia
said in a statement.
"Bank Indonesia is authorised to set higher minimum capital
from the range set, in circumstances where Bank Indonesia
considers the calculation of minimum capital is not adequate to
anticipate risk," Bank Indonesia said.
Banks with the highest risk profile will need a capital
adequacy ratio of between 11 to 14 percent, while banks with the
lowest risk profile will still only need a capital adequacy
ratio of 8 percent. Medium risk profiles require 9-11 percent.
The central bank said it will review and evaluate the risk
profiles based on internal capital adequacy assessment
Bank Indonesia on Nov 23 said that foreign banks will need
to hold 8 percent of their local third party funds in bonds as a
capital buffer by June 2013.
The central bank will also link permits for all banks'
business activities and products to their level of core capital,
in a new regulation planned for January, as it steps up efforts
to control a fragmented banking sector.
Indonesia's larger banks have maintained high levels of Tier
1 capital and proved resilient to global financial troubles, but
there are many small rural lenders across the archipelago.
The new requirements are unlikely to deter global banks from
expanding in Indonesia, where the economy is growing over 6
percent per year and loan growth stands at over 20 percent.
(Reporting by Rieka Rahadiana and Adriana Nina Kusuma; Editing
by Neil Chatterjee)