Indonesia’s largest bank Bank Mandiri is set to establish a private banking business in Singapore. The decision comes in the wake of crackdown by Indonesian authorities on tax evasion and illegal parking of money in foreign countries, especially Singapore. The government had announced an amnesty program, in which citizens were allowed to report previously hidden domestic or overseas holdings and pay a small penalty. This had unearthed 4,900 trillion rupiah ($367.5 billion) in declared assets. Bank Mandiri’s President Kartika Wirjoatmodjo said around 700 trillion rupiah in declared cash and securities are still parked in overseas banks – mostly in Singapore – and added that the bank wants to capture this market by giving them services in Singapore. Indonesia is also expected to join the Automatic Exchange of Information, a framework developed by the Organization for Economic Cooperation and Development in which financial regulators will share information about foreign taxpayer accounts. Initially the bank will be able to serve corporate clients in Singapore as it will have to get approval as a ‘Qualified ASEAN Bank by the Monetary Authority of Singapore in order to serve wealthy individuals.
