State lender Bank Negara Indonesia (BNI) plans to set up a subsidiary in Malaysia this year after the two countries signed an agreement on reciprocity-based banking business.
BNI is waiting for the holding company of state-owned companies in the banking sector to issue a policy, which is currently under process, BNI Director for Treasury and International Affairs Panji Irawan said at the Indonesia Stock Exchange here on Thursday.
To set up the subsidiary, BNI is considering involving other state lenders, including Bank Mandiri and Bank Rakyat Indonesia, to shore up its business capacity and efficiency, he added.
“Whoever is interested in it, can cooperate with us. We cannot do it alone,” he noted.
In view of its financial capacity, BNI is likely to set up a subsidiary rather than establishing a branch office in the neighboring country, he revealed.
“The subsidiary will not serve as a branch. It will be locally incorporated and must have a board of directors,” he explained.
Under the Malaysian law, BNI must have a paid-up capital of US$66 million to US$75 million to set up the subsidiary, he informed.
BNI President Director Achmad Baiquni wanted the bank to strengthen its network in the neighboring country in the first half of this year.