Foreign Bank Which Operates In Indonesia (Citibank)

The central bank this month removed sanctions imposed on Citibank Indonesia two years ago when debt collectors working for the lender were linked to the death of a client. The ban had prevented the bank from adding new credit card clients, and the lifted suspension now paves the way for the biggest foreign bank in Indonesia to begin offering a range of credit card products.Citibank Indonesia is the Indonesian unit of New York-based Citigroup. A spokesman for Bank Indonesia told the Jakarta Globe on Friday that the sanctions against Citibank Indonesia were lifted on May 1. Yes theyve been removed, Difi A. Djohansyah said on Friday.Mona Monika, Citibanks assistant vice president for corporate affairs confirmed the removal of the suspension but declined to comment further.The sanctions came after politician Irzen Octa, a client of Citibank, died at a Citibank office in South Jakarta in March 2011, immediately following a grilling by three private debt collectors working on behalf of the bank. Irzens family and an independent autopsy performed by the countrys leading coroner said he was assaulted before his death, which appeared to be from a blood vessel rupture.Arief Lukman, Henry Waslinto and Donald Haris were sentenced to five years imprisonment over the death, which brought to light unsavory debt collection tactics commonly employed to recoup unpaid credit card bills in the country. While the central bank ruled Citibank was not allowed to acquire new credit card clients for two years, the lender was allowed to maintain services for its existing credit card customers.Tigor M. Siahaan, Citibanks country officer in Indonesia, said on Thursday that the bank would improve lending practices before offering new credit cards in Indonesia.We are optimistic, though. Many customers are very loyal to Citibank, he said on sidelines of a seminar in Jakarta, adding that the lender would abide by a central bank regulation issued in 2012 about credit card operations in Indonesia.

The central bank issued a regulation in June of last year restricting banks from offering credit cards to people with incomes below Rp 3 million ($310) per month. The regulation also included a guide to permissible debt collection practices as well as stipulating clear information be provided to customers about interest obligations and the terms and conditions attached to a credit card.The regulation also requires credit card issuers to ensure that people with incomes from Rp 3 million per month to Rp 10 million per month do not hold more than two credit cards. According to data from the central bank, there were 7.8 million credit card holders in Indonesia last year. Among the 19 credit card issuers in the country, the top five were Bank Central Asia, Bank Mandiri, Bank Negara Indonesia, Citibank and CIMB Niaga.Tigor said that 65 percent of Citibanks revenue in Indonesia came from its corporate lending business, which includes providing loans for working capital, investment, export-import financing as well as cash management. The remaining 35 percent comes from its consumer business, including from credit cards, personal loans as well as wealth management for affluent customers.Citibanks Indonesian net income last year stood at Rp 1.87 trillion, almost unchanged from the Rp 1.86 trillion it recorded in 2011.The banks predecessor, the International Banking Corporation, was established in Batavia in 1918. Citibank Indonesia now employs more than 5,000 people. It had almost Rp 61.8 trillion in assets as of 2011.

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