JAKARTA. Ahead of the end of 2016, number of banks will complete consolidation process, either through merger or acquisition.

According to Financial Service Authority or FSA’s  record, one of the consolidation processes involves Bank Antar Daerah and PT Bank Windu Kentjana International Tbk. Meanwhile, South Korean financial institution APRO Financial also in a process of acquiring Bank Andara.

Deputy Commissioner for of Banking Supervision at FSA Irwan Lubis said that APRO is also considering to conduct due diligence examination to one to three banks.

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This year Banten Provincial Government through PT Banten Global Development has acquired 34.41% of Bank Pundi Indonesia’s shares. After the acqusition, the name of Bank Pundi Indonesia was replaced by Bank Pembangunan Daerah Banten (Banten Regional Development Bank).

Irman added that HSBC Indonesia and Bank Ekonomi Raharja will settle the consolidation in April 2017. Head of Retail Bank&Wealth Management at HSBC Indonesia Blake Hellam said that HSBC is reconciling technical aspects of the consolidation, such as banking system, business, network, and client.

Irwan claimed that FSA has requested Ministry of Finance to provide tax incentive for supporting bank’s consolidation.Until now, Ministry of Finance is still reviewing the demand for tax incentive. Irwan assumed that the incentive will reduce tax revenues, however, the merger has potential to generate larger tax revenues.

Aside of tax incentive, FSA also proposed for relaxing regulation on minimum statutory requirement and credit allocation for micro-small-medium enterprises. (Translator: Muhamad Farid)