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Indonesian Central Bank Lifts Ban On Recruiting Affluent Clients
Vanessa Doctor and Tom Burroughes
5 June 2011
Indonesia’s
central bank has lifted its temporary ban on banks’ soliciting for new priority
banking and wealth management clients that it had imposed on institutions at a time when it had slapped a year-long ban on Citigroup. Bank Indonesia
said it had checked the policies, systems and procedures of 23 banks that
operate wealth management and priority banking. From 3 June, its ban on such
firms attracting new business ended. “Banks that have made improvements on the findings of Bank Indonesia and
are now fully prepared in terms of their policies, systems and procedures as
well as internal supervision will be permitted to accept new priority
banking/wealth management customers as normal,” the central bank said in a
release. “Meanwhile, banks that have not completed follow-up actions
on Bank Indonesia’s findings and, therefore, continue to suffer from weaknesses
in their policies, systems and procedures as well as internal supervision are
still not permitted to accept new priority banking/wealth management customers
until a time when the necessary improvements have been made,” it said, while
not identifying such banks by name. On 6 May, Bank Indonesia slapped a 12-month ban on Citigroup from
soliciting new premium banking clients due to the “problems plaguing Citibank
associated with priority services (Citigold) and credit cards”, according to
the wording of the central bank’s statement in early May. In that statement, Bank Indonesia said its checks on
Citigroup had “unearthed violations of internal bank regulations and exposed
weaknesses in the application of risk management”. Citigroup cannot acquire new Citigold clients for one year,
while credit card issuance to new clients has been suspended for two years, and
credit card billing services by third parties has been banned for two years.