Jakarta (ANTARA News) - Financial Service Authority (OJK) Deputy Commissioner Slamet Edy Poernomo said national banks need to reinforce their capital so that they remain competitive.
The strengthening of capital is needed by banks to face the current high interest rates.
"Therefore, OJK supports banking consolidation in the framework of strengthening banking capital," Peornomo stated.
He also said the consolidation of banking could be carried out through a merger or through acquisitions. Over the past year, the OJK has conducted assessments on the condition of respective banks.
"We want to provide directives. It is impossible for us to reduce the number of banks," noted Poernomo.
Banking consolidation, he continued, can also assist OJKs task in regulating and supervising the banking industry, supported by increasingly developing technology.
"The control is even better. So we monitor only the bank, because the small bank is included in it. So the issue is going forward, with consolidation there will be a strengthening of capital, it can be done with mergers, with acquisitions," said Slamet.
Meanwhile, senior economist at the Indonesia Stock Exchange (IDX), Poltak Hotradero, said in learning from the 1998 crisis, the strengthening of capital was, indeed, a necessity.
"Whether it is a merger, acquisition, or adding capital through the capital market, that is an option," said Poltak.
Likewise, related to the source of capital, whether domestic or foreign capital, he considered this not to be a problem.
"They are very necessary. It is not a matter of a black cat or white cat, yet it is important to catch mice," he said.
Source: ANTARA News