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Jakarta (ANTARA News) - Bank Indonesia (the central bank/BI) has issued an in-principle permit to Bank Niaga and Bank Lippo to merge their businesses.

"They have applied for a permit. In principle, we have no objection to the planned merger," Director of the Banking Research and Regulation Directorate at Bank Indonesia Halim Alamsyah said on Friday.

Given the BI`s approval, the merger of the two banks whose shares are owned by Malaysia`s Khazanah Nasional Berhad can be realized soon, he said.

"The Directorate of Bank Lincensing and Information at Bank Indonesia is handling the merger process. It will take long time to merge the two banks," he said.

The merger of the two banks accords with the central bank`s single presence policy requiring a controling shareholder in more than one banks to submit its business plan by the end of 2007 at the latest.

To date, Khazanah indirectly controls around 93 percent of Bank Lippo`s shares through Santubong Investments BV and Greatville Pte Ltd. and 64 percent of Bank Niaga`s shares through Bumiputera-Commerce Holdings Berhad (BCHB).

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