Foreign Banks Operating in Indonesia

The Presidum Cabinet instruction is realized with the publication of law No. 14/1967 on banking and Government Regulation No. 3 in 1968 about foreign banks. In the Government regulations among other established that foreign banks that sought in the field of commercial banks can only be established in the form of a branch office of the bank's existing overseas or a mixture between banks foreign banks and national bank incorporated bank Indonesia law, and the mixture should form a limited liability company. Based on the Government regulation of 11 foreign banks get permission to attempt in Indonesia which consists of 10 branch offices of the bank based abroad and one bank. The ten branch offices of foreign banks was National City Bank of New York has changed became Citibank, Bank of America, Chase Manhattan Bank, American Express Bank, The Chartered Bank which later became the Standard Chartered, Algemene Bank Nederland and later on the ABN-Amro, Deutsche Bank, Hong Kong and Shanghai Banking Corporation (HSBC), Bank of Tokyo-Tokyo turns into a Mitsibishi Bank and Bangkok Bank. While the mixture is mixed Bank banks are PT Bank Perdania. In addition permitted to conduct business activities as commercial banks, foreign banks are also given the opportunity to run a business development bank, but only the foreign banks in the form of bank. Place of business of the public bank foreign was restricted in Jakarta while the foreign development banks can be set up and run a business in Jakarta and in other places throughout there is a real need. In conducting business activities, foreign banks are prohibited from bringing funds in the form of savings. The presence of the ten branch offices of foreign banks was later given full assurance in the Government's commitment in the WTO/GATS in 1998. It means the ten branch offices of foreign banks are allowed to continue to operate in the form of branch office and any change in government policy did not result in any of them. The global financial crisis that occurred in 2007/08 has raised again the debate about the presence of foreigners in the banking sector. This among other things triggered the experience of countries in Central and Eastern Europe. The remaining question is whether the bank transmits its financial difficulties by reducing credit that transmitted to the customer or client company branch offices. Pengalama Central and Eastern Europe at the beginning of the crisis of 20072008 show that the financial problems experienced by the Head Office of a bank passed in cross border into the heart of Europe and the East. As a result, the company had difficulty obtaining credit from foreign banks that its headquarters had financial difficulties. The reason is banks reluctant to procure credit to its customers in lua. The condition of this kind can lead to votalitas and instability in countries where such foreign bank branches operate. This experience prompted the question of whether the presence of foreign banks in a country better in the form of the company. It is understood that the presence of foreign banks can bring benefits to the banking industry in recipient countries. Foreign banks facilitate the access of recipient countries (host countries) of products and new technology and improve the efficiency of financial markets and competition. The presence of foreign banks in Indonesia in the form of Branch Office brings its own problems. In addition to natural risks such as those in Central and Eastern Europe more and more micro is the obligation of the foreign bank branch offices became participants of the Lps

(LPS). Participation of a foreign bank branch offices pose a legal problem if the foreign bank headquarters revoked its business license and then liquidated. Bankruptcy assets legally branch offices are part of the assets of the Central Office so that when the head office bank revoked its business license and assets of the branches became part of the liquidation of the assets and overall bank assets will be used to pay the obligations of the bank. Meanwhile, liability to customers branch office savings up to a certain amount of restriction is the obligation of the GOVERNMENT. With these conditions the potential conflicts of law be arising. The question of law is whether the interests of LPS should take precedence over the interests of other creditors of the bank headquarters is concerned. Article 59 of the ACT stipulates that the LPS LPS mastered bank assets are liquidated and the proceeds of the asset sales first used for payments to the GOVERNMENT to return the funds the GOVERNMENT has used to pay customer repository. Based on the interests of the GOVERNMENT should take precedence, the reason is the bank branch offices operating in Indonesia so that it is subject to the law of Indonesia. The participation as a member of the GOVERNMENT must expressly noted the requirements that the assets of the foreign bank branch must first be used to pay its obligations in Indonesia. Bankruptcy cross country is strange problem and it needs rules that are also cross country. But it's hard to imagine the presence of rules applicable internationally liquidation. Therefore there is thought to be a foreign branch office legal form was changed to Indonesia in the form of legal entity company.

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http://zulsitompul.wordpress.com/2011/04/18/bank-asing/ http://id.wikipedia.org/wiki/Daftar_bank_di_Indonesia