REPUBLIKA.CO.ID, JAKARTA -- A number of foreign banks of Singapore and Malaysia plan to take over export credit from state owned banks and local private banks. Director of the Finance, Eko B Suproyanto said this phenomenon occurred in South Sulawesi, Bali, Medan, Solo and Palembang.

Foreign banks are offering lower interest rates in the middle of exchange rate fluctuations and high interest rates in Indonesia.

"State owned banks, which have financed many exporters will come under pressure. Moreover, a number of state owned banks' debtors are now switching to foreign banks," Supriyanto said on Thursday.

Foreign financial institutions are also attracting smaller debtors. Supriyanto said that the competition has been occurred a year ahead of ASEAN Economic Community. State owned banks and local private banks must continue to monitor its debtors intensively.

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