REPUBLIKA.CO.ID, JAKARTA - Economist from Indonesian Institute of Science (LIPI), Latif Adam, suggested Bank Indonesia (BI) to regulate the location of foreign bank offices.

"Whether it will be located only in capital province or until district," Adam said on Thursday.

His statement is following BI policy on Capital Equivalency Maintained Assets (CEMA). The policy requires every foreign bank office to have minimum capital of a trillion IDR to open a branch office in Indonesia. The policy will be applied in January 1, 2013.

Adam said the policy was BI effort to promote reciprocal principle, aiming to create balance between foreign and national banks offices. The regulation eases national banks to expand their operation abroad. 

The Observer from Financial and Economic Development Institute (Indef), Enny Sri Hartati, said Indonesian regulation on banking system was too liberal in allowing foreign banks to expand its business in Indonesia. Hartati said that Indonesia must pun some restriction to limit foreign banks operation here. 

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