foreign banks operating in indonesia.docx

7/28/2019 Foreign Banks Operating in Indonesia.docx

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Foreign Banks Operating in Indonesia

The Presidum Cabinet instruction is realized with the publication of law No. 14/1967 onbanking and Government Regulation No. 3 in 1968 about foreign banks. In the Government

regulations among other established that foreign banks that sought in the field of commercial

banks can only be established in the form of a branch office of the bank's existing overseas or amixture between banks foreign banks and national bank incorporated bank Indonesia law, and

the mixture should form a limited liability company. Based on the Government regulation of 11

foreign banks get permission to attempt in Indonesia which consists of 10 branch offices of thebank based abroad and one bank. The ten branch offices of foreign banks was National City

Bank of New York has changed became Citibank, Bank of America, Chase Manhattan Bank,

American Express Bank, The Chartered Bank which later became the Standard Chartered,

Algemene Bank Nederland and later on the ABN-Amro, Deutsche Bank, Hong Kong andShanghai Banking Corporation (HSBC), Bank of Tokyo-Tokyo turns into a Mitsibishi Bank and

Bangkok Bank. While the mixture is mixed Bank banks are PT Bank Perdania.

In addition permitted to conduct business activities as commercial banks, foreign banks

are also given the opportunity to run a business development bank, but only the foreign banks in

the form of bank. Place of business of the public bank foreign was restricted in Jakarta while the

foreign development banks can be set up and run a business in Jakarta and in other placesthroughout there is a real need. In conducting business activities, foreign banks are prohibited

from bringing funds in the form of savings. The presence of the ten branch offices of foreign

banks was later given full assurance in the Government's commitment in the WTO/GATS in

1998. It means the ten branch offices of foreign banks are allowed to continue to operate in theform of branch office and any change in government policy did not result in any of them.

The global financial crisis that occurred in 2007/08 has raised again the debate about thepresence of foreigners in the banking sector. This among other things triggered the experience of

countries in Central and Eastern Europe. The remaining question is whether the bank transmits

its financial difficulties by reducing credit that transmitted to the customer or client companybranch offices. Pengalama Central and Eastern Europe at the beginning of the crisis of 2007-

2008 show that the financial problems experienced by the Head Office of a bank passed in cross

border into the heart of Europe and the East. As a result, the company had difficulty obtainingcredit from foreign banks that its headquarters had financial difficulties. The reason is banks

reluctant to procure credit to its customers in lua. The condition of this kind can lead to votalitas

and instability in countries where such foreign bank branches operate. This experience prompted

the question of whether the presence of foreign banks in a country better in the form of the

company.

It is understood that the presence of foreign banks can bring benefits to the banking

industry in recipient countries. Foreign banks facilitate the access of recipient countries (hostcountries) of products and new technology and improve the efficiency of financial markets and

competition. The presence of foreign banks in Indonesia in the form of Branch Office brings its

own problems. In addition to natural risks such as those in Central and Eastern Europe more andmore micro is the obligation of the foreign bank branch offices became participants of the Lps


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(LPS). Participation of a foreign bank branch offices pose a legal problem if the foreign bank

headquarters revoked its business license and then liquidated. Bankruptcy assets legally branch

offices are part of the assets of the Central Office so that when the head office bank revoked itsbusiness license and assets of the branches became part of the liquidation of the assets and

overall bank assets will be used to pay the obligations of the bank. Meanwhile, liability to

customers branch office savings up to a certain amount of restriction is the obligation of theGOVERNMENT. With these conditions the potential conflicts of law be arising.

The question of law is whether the interests of LPS should take precedence over the

interests of other creditors of the bank headquarters is concerned. Article 59 of the ACTstipulates that the LPS LPS mastered bank assets are liquidated and the proceeds of the asset

sales first used for payments to the GOVERNMENT to return the funds the GOVERNMENT

has used to pay customer repository. Based on the interests of the GOVERNMENT should take

precedence, the reason is the bank branch offices operating in Indonesia so that it is subject to thelaw of Indonesia. The participation as a member of the GOVERNMENT must expressly noted

the requirements that the assets of the foreign bank branch must first be used to pay its

obligations in Indonesia. Bankruptcy cross country is strange problem and it needs rules that arealso cross country. But it's hard to imagine the presence of rules applicable internationally

liquidation. Therefore there is thought to be a foreign branch office legal form was changed to

Indonesia in the form of legal entity company.


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Reverence

- http://zulsitompul.wordpress.com/2011/04/18/bank-asing/- http://id.wikipedia.org/wiki/Daftar_bank_di_Indonesia
http://zulsitompul.wordpress.com/2011/04/18/bank-asing/http://zulsitompul.wordpress.com/2011/04/18/bank-asing/http://zulsitompul.wordpress.com/2011/04/18/bank-asing/

foreign banks operating in indonesia.docx

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