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Number of banks in Indonesia reaches 1,712

19 March 2019 07:38

JAKARTA - The Financial Services Authority (OJK) continues to encourage banks to consolidate in order to compete and benefit maximally for customers.

OJK noted, as of December 2018, Indonesia has 115 commercial banks and 1,597 People's Credit Banks (BPR). In total, there are 1,712 banks in Indonesia — the highest number in Southeast Asia.

According to Boedi Armanto, Deputy Commissioner of Banking Supervision IV of OJK, consolidation will make banks stronger and able to compete because the capital will be greater.

"Operations are more efficient, service [to customers] is better, and interest is lower," Mr Armanto told CNBC Indonesia, Monday (18/3).

Mr Armanto added that consolidation will also make loan interest cheaper when inflation is high. This is caused by the economic of scale and economic scope.

"This will make [credit] products to be relatively cheaper, although it may still be more expensive than in neighbouring countries," Mr Armanto said. (MS)

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