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Indonesia - Banking

Indonesia has more than 100 commercial banks operating in the city and parts of the rural areas. These banks are either locally owned or subsidiaries of foreign banks operating in Indonesia. It is possible to open a bank account as a foreigner in Indonesia, but the procedure for opening a new bank account is, at times, strict and lengthy.

The national currency for Indonesia is the Rupiah, abbreviated as Rp. Before you open a bank account in Indonesia or transact any money, it is important to understand how the Indonesian rupiah works. Normally, the rupiah is exchanged in both notes and coins of varying denominations. However, due to inflation, most of the Indonesian rupiah coins have been rendered obsolete.

Rupiah notes are issued in denominations of either Rp 1000, Rp 2,000, Rp 5,000, and Rp 10,000 notes. You can also expect to see Rp 20,000, Rp 50,000 and Rp 100,000 notes in your daily transactions. Only the Rp 1000 note is issued in coin form as well, though the 1000Rp coin is also quickly being phased out.

Rupiah coins are issued in various denominations including Rp 100 and Rp 50. The Rp 50 coins are hard to come by because of their shortage and their lost value due to inflation. Thus smaller amounts of change are often rounded up or down, and in some cases, especially in shops, condiments are offered instead of coins as change.

Opening a bank account in Indonesia

As a foreigner, always choose a bank that meets all your financial needs. You have the option of opening an account with a regional bank or one of the national Indonesian banks. Banks in Indonesia open from 8am to 3pm from Monday to Friday. On weekends, the operating time is between 8am to 1pm.

Some of the national Indonesian banks include Mandiri Bank, PT Bank Internasional, Danamon Bank, CIMB Niaga Bank, and Indonesia TbK. Foreign banks in Indonesia include the Bank of America, Royal Bank of Scotland, Deutsche Bank AG, Bank of China Limited, HSBC Indonesia, and JP Morgan Chase. Foreign banks allow you to open a foreign currency account or rupiah account.

There are about 5 Islamic banks in Indonesia operating under Sharia Law. The Islamic banks follow the decree of Sharia that dictates no interest to be charged on transactions, neither will such banks accept fixed or floating payments. In addition, Sharia banks do not finance businesses whose product or service is considered Haram according to Islamic law.

Opening an account with one of the Indonesian banks should be pretty straightforward. However, the foreign banks are a bit stricter as they take intensive measures to protect themselves from fraud. As an expat, it should be easy to open an account with a foreign bank you are already banking with. If you do not currently have an account with a foreign bank that operates in Indonesia, then you will have to provide some information before your new account is approved.

To open an account with a foreign bank, you will be required to provide a copy of your passport. A copy of your temporary visa permit, KITA OR KMS, will also be asked for. If you are a permanent resident in Indonesia, the banks will ask you to produce your permanent residency license card or KITAP. If you are working in Indonesia, then a reference letter from your employer or sponsor will be mandated.

For anyone wanting to open a checking account with a foreign bank in Indonesia, there are more rules to follow. The bank will ask for a reference letter from a previous bank as well as the tax registration number of the company that employs you. Your employer will also have to prove that they are making their tax income remittance on behalf of you as their employee.

Most banks accept a minimum of Rp 500,000 to open an account with them. It should take a day to activate your new bank account. Debit and credit cards are issued on the same day as well. Opening a US dollar account also requires a minimum operating balance and this sum varies with banks. There are banks that will allow you to open an account if you have a sponsor holding an account with the same bank.

Using ATMs in Indonesia

Every major Indonesian bank should have an ATM lobby right next to it in a city or rural area. Indonesians love to make most of their financial transactions at ATM points to avoid the bank queues. ATMs in Indonesia can be used for money withdrawals and payment of bills.

Before you open a bank account, find out if the bank in question is affiliated with the ATM network, Prima. This ensures that you make transactions at no charge from any of their ATM branches. Note that all bank ATMs in Indonesia, with the exception of Citibank, will dispense money in Rupiah even if you hold a US Dollar account.

As a safety precaution, avoiding withdrawing money from ATM points located in isolated or poorly lit areas. Never withdraw large sums of money at once, and always tuck your money away safely before leaving the ATM lobby. Unsuspecting foreigners are often targeted and robbed at ATM cash points.

Acquiring a Credit Card in Indonesia

It is generally difficult for an expat to acquire a credit card in Indonesia. This is because of the many prevalent cases of credit card fraud committed by non-Indonesian account holders. Only if you hold a previous credit card with your respective bank will you be allowed to renew it or take out a new credit card.

In cases where an expat is granted credit card privileges, the process is often an expensive one. Indonesian banks will require a deposit that is 80% to 100% of the total credit available on the card you are applying for. Otherwise, most credit card applications by foreigners often go unprocessed or are hit with a rejection stamp.

If you already hold a credit card as a foreigner, you have to be careful with how you use it. Avoid using your credit card for small transactions like paying for drinks in a bar or paying for items in a shop. Your credit card information can easily be stolen and used to commit fraud. Always shred credit card receipts to prevent them from ending up in the wrong hands.

Expats can open accounts with Indonesian banks but the process can be quite involved at times. However, the process may be faster if you have an Indonesian sponsor and can prove your residency as a temporary or permanent citizen. With the many cases of financial fraud in Indonesia, always keep all your money transactions safe and private, regardless of whether you are using ATMs or credit cards.

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