The central bank of Indonesia deputy governor Muliaman Hadad was quoted by The Jakarta Post as saying that investors would be allowed to own more than a 50% of a bank if they met specific requirements as defined by the central bank.
"The approval will be very selective and will apply to very special cases," Muliaman added.
The regulation, which is expected to come in force in July this year, will approve acquisition of majority stakes in domestic banks while an ownership cap for investors outside of the financial sector would be imposed.
Before investing in any local, Bank of Indonesia will inspect the financial health of the firms, and to ensure the effective implantation of the law, it will conduct three audits of local banks within an 18-month period to assess their performance.
Under the proposed law, BI will allow individual investors to hold a maximum 20% stake, non-financial institutions will be allowed 30% stakes and financial institutions with 40% stakes.
Indonesia currently allows foreign investors to own up to 99% of a local bank.
Commenting on the demand of new regulation BI said that the law will help unhealthy banks that needed to find strategic investors to improve their financial condition.
Under the multiple-license regulation, Bank Indonesia will take under consideration of bank capitalization when issuing licenses.
