Foreign banks blasted

FEARING that the financial sector is in danger of being dominated by foreign banks, Indonesian lawmakers are looking to put the squeeze on their activities in Indonesia.

Members of Parliament are accusing foreign-controlled institutions of investing more heavily in securities than in industries that could help spur Indonesian economic growth.

As a result, such banks now account for half of all bank assets in the country, up from just a 10th of the total assets only 10 years ago.

Mr Achsanul Qosasi, deputy chairman of the finance and bank commission, said: 'They are doing a great deal of funding here, and putting a lot of those funds in low-risk government bonds, instead of focusing on lending that can help grow the economy.'

In fact, their share in the funding market has also been growing, as they have moved aggressively to cash in on the growing wealth of Indonesians.

With the rich drawn by the international reputations of foreign banks, domestic banks have found it tough to grow, say MPs.

- Sitiemilia , Singapore.