CHINA Construction Bank Corp. (CCB) is buying a controlling stake in Jakarta-based PT Bank Windu Kentjana International, in a rare case of a foreign bank being allowed to own more than 40 percent of an Indonesian lender.

    The Indonesian financial regulator’s move to give an exemption to the country’s 40 percent foreign ownership cap could pave the way for more acquisitions by foreign banks that are eager to tap growth in Southeast Asia’s biggest economy.

    “The agenda is to support the consolidation process, so the supervisor can give more leeway, for more than 40 percent,” Nelson Tampubolon, banking supervisor at the Indonesia Financial Services Authority, said Friday.

    There are around 120 commercial banks in the country of 250 million people.

    The ownership cap has acted as a stumbling block to deals in the past, with some foreign banks unwilling to take a minority stake in Indonesian lenders as that is seen as punitive for capital under new global rules.

    Because of the cap, Singapore’s DBS Group Holdings dropped its takeover bid for Indonesia’s PT Bank Danamon Indonesia Tbk in 2013.

    Tampubolon had said in June that CCB would be permitted to own more than 40 percent of an Indonesian bank should it buy stakes in two separate lenders and combine them into a single entity. (SD-Agencies)