State Bank of India Wants a Second Indonesian Bank

India’s top lender, State Bank of India, is looking to acquire a bank in Indonesia, and has set aside more than $100 million for the purchase, the Financial Express reported on Monday, citing a senior company executive.

“We have short-listed the names of two or three banks and will zero in on one of them soon.

The bank has a budget of over $100 million for buying a bank in Indonesia,” said Pratip Chaudhuri, deputy managing director at SBI. 

Officials at the bank were not immediately available to comment on the story. 

SBI’s acquisition plan would be its second purchase of an Indonesian bank after it bought a stake in Bank Indomonex four years ago. It converted the bank into Bank SBI Indonesia. 

SBI Indonesia has several branches in Jakarta,  Bandung, Surabaya and Medan, according to its Web site.

Indonesia’s accelerating economy, which grew 5.8 percent in the third quarter of this year from a year earlier, is forecast to expand by 6 percent this year and 6.2 percent next year, according to data from the government. 

The growth is thanks to a boom in consumer spending and a higher lending growth target, which is forecast to increase by 22 percent this year, Bank Indonesia, the country’s central bank, has said.

There are 121 commercial banks currently operating in Indonesia. Bankers and analysts want the number reduced to make supervision more efficient. 

Indonesia’s central bank has encouraged banks in Southeast Asia’s largest economy to merge in order to improve efficiency after it spent more than Rp 450 trillion ($50.4 billion) to bail out lenders during the 1998 Asian financial crisis.

Joni Swastanto, the director of banking supervision at Bank Indonesia, was not available for comment on this story.

Malaysia combined its 54 banks into 10 and Thailand cut the number of financial service companies to 12 from 16 several years ago.