Indonesia: A tale of two sectors
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Indonesia: A tale of two sectors

Banking in Indonesia has a split personality. In the retail sector foreign banks are introducing state-of-the-art services and buying up bargains among local banks to expand their networks. Local commercial banks are in a much gloomier situation. The costs of recapitalization are rising, influential creditors are resisting attempts to restructure and the bankruptcy court has proved ineffective. Maggie Ford reports

If you've a fistful of dollars - or even a briefcase stuffed full of devalued Indonesian rupiah - there's a multitude of top banking choices in Indonesia these days.

A customer driving down the main streets of the capital, Jakarta, can take his pick from an array of hi-tech options, whether he has funds to deposit, remittances to send, or simply wants a credit card.

"The immediate future of Indonesian banking is in retail," says Paul Milton of Australia's Commonwealth Bank, which has a joint venture with Bank Internasional Indonesia, a large local bank. "There's hardly any corporate lending going on - most banks are just trying to get their money back." To tempt customers he's offering cash prizes and free trips overseas along with new flexible accounts.

As so often in Asian retail banking, Citibank leads the way. Its new boutique ATM product combines the convenience of electronic banking with an opportunity for human contact. It's less than a branch, more than a machine - customers who use it can open accounts, deposit or withdraw money, pay credit cards or utilities bills, even apply for consumer loans.

Nor is it necessary any more to leave home to perform financial chores.

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