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OJK encourages banking industry for consolidation

24 March 2020 16:56

JAKARTA - The Financial Services Authority encourages the banking industry to carry out consolidation efforts to create a strong banking structure, enlarge business scale and increase competitiveness through innovation capabilities, and can contribute significantly to the national economy.

As a basis for this goal, OJK issued OJK Regulation Number 12 / POJK.03 / 2020 on March 16, 2020 concerning Consolidation of Commercial Banks which took effect from the enactment on March 17, 2020. These changes require the banking sector to be more adaptive, innovative and competitive. The large investment cost of implementing this supporting technology requires demands to strengthen capital and increase business scale on a sustainable basis. Therefore, demands for additional capital, increasing business scale and technological infrastructure support are increasingly prominent.

"To deal with the changes in the ecosystem and the demands of massive innovation, the consolidation of the banking sector has become a necessity," said OJK Banking Executive Chief Executive Heru Kristiyana in a release.

OJK believes that this consolidation and increase in minimum core capital and minimum CEMA can benefit the banking industry, reduce competition costs, make banks more efficient and contribute to the Indonesian economy as a whole. (LM)

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