Bank Rakyat Indonesia
Encyclopedia
Bank Rakyat Indonesia or PT. Bank Rakyat Indonesia (Persero) (BRI), (tr. People's Bank of Indonesia
), is one of the larger banks in Indonesia. It specialises in small scale and microfinance
style borrowing from and lending to its approximately 30 million retail clients through its over 4,000 branches, units and rural service posts. It also has a comparatively small, but growing, corporate business. As of 2010 it is the second largest bank in Indonesia by asset.
It is currently 70% government owned operating company
(Persero) and has been government owned for the entire period since the war of independence (1945 to 1949) to November 2003, when 30% of its shares were sold through an IPO.
colonial period as "De Poerwokertosche Hulp en Spaarbank der Inlandsche Hoofden", by Raden Aria Wirjaatmadja. It then underwent its first (of many) name changes to "Hulp-en Spaarbank der Inlandsche Bestuurs Ambtenaren" (tr. Aid and Savings Bank for Local Civil Servants).
Going through several name changes, its final name during the colonial period was "Algemene Volkscredietbank (AVB)", or People's General Credit Bank, in 1934. This translates loosely into Indonesian as "Bank Rakyat Serikat". At this point it was one of the largest institutions in the (then) colony.
The bank's operations were affected by the Japan
ese occupation during the 1942 to 1945 period of World War II
, including a further name change to "Shomin Ginkou" (tr. "People's Bank"). After the Indonesian declaration of independence, on 17 August 1945 the bank was officially nationalised by the new government and then re-named "Bank Rakyat Indonesia Serikat".
As a bank, wholly owned by the government, BRI's structure then largely followed government whim, which moved rapidly towards socialism
under President Sukarno
and then to state authoritarianism
under President Suharto. This involved being folded into, and then out of, Bank Indonesia
(now the central bank
of Indonesia). BRI gained its current name and status in 1992.
BRI was nearly unique in Indonesia in the East Asian financial crisis
of 1997, in that its operations were largely unaffected. This was because it had very little, if any, lending in foreign currencies or to the large corporations that had been borrowing heavily overseas, as most of the other large Indonesian banks had.
Since then BRI has been concentrating on increasing its core business and improving its risk management
practices. As part of the reformasi
(reform) process in Indonesia since 1998, the government has been steadily reducing its influence on the Bank's day to day operations, culminating in its IPO.
It is also seeking to comply with the Basel II
accords, as mandated by Bank Indonesia
, by 2008.
During period of 2006-2011 its assets have jumped almost 62 percent. The bank topped the list of the nation’s most profitable banks for six years, recorded assets of Rp 249.56 trillion (US$28.6 billion) in 2010, up from Rp 154.72 trillion in 2006.
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
), is one of the larger banks in Indonesia. It specialises in small scale and microfinance
Microfinance
Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
style borrowing from and lending to its approximately 30 million retail clients through its over 4,000 branches, units and rural service posts. It also has a comparatively small, but growing, corporate business. As of 2010 it is the second largest bank in Indonesia by asset.
It is currently 70% government owned operating company
Government-owned corporation
A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...
(Persero) and has been government owned for the entire period since the war of independence (1945 to 1949) to November 2003, when 30% of its shares were sold through an IPO.
History
BRI was founded in 1895, during the DutchUnited Kingdom of the Netherlands
United Kingdom of the Netherlands is the unofficial name used to refer to Kingdom of the Netherlands during the period after it was first created from part of the First French Empire and before the new kingdom of Belgium split out in 1830...
colonial period as "De Poerwokertosche Hulp en Spaarbank der Inlandsche Hoofden", by Raden Aria Wirjaatmadja. It then underwent its first (of many) name changes to "Hulp-en Spaarbank der Inlandsche Bestuurs Ambtenaren" (tr. Aid and Savings Bank for Local Civil Servants).
Going through several name changes, its final name during the colonial period was "Algemene Volkscredietbank (AVB)", or People's General Credit Bank, in 1934. This translates loosely into Indonesian as "Bank Rakyat Serikat". At this point it was one of the largest institutions in the (then) colony.
The bank's operations were affected by the Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese occupation during the 1942 to 1945 period of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, including a further name change to "Shomin Ginkou" (tr. "People's Bank"). After the Indonesian declaration of independence, on 17 August 1945 the bank was officially nationalised by the new government and then re-named "Bank Rakyat Indonesia Serikat".
As a bank, wholly owned by the government, BRI's structure then largely followed government whim, which moved rapidly towards socialism
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
under President Sukarno
Sukarno
Sukarno, born Kusno Sosrodihardjo was the first President of Indonesia.Sukarno was the leader of his country's struggle for independence from the Netherlands and was Indonesia's first President from 1945 to 1967...
and then to state authoritarianism
Authoritarianism
Authoritarianism is a form of social organization characterized by submission to authority. It is usually opposed to individualism and democracy...
under President Suharto. This involved being folded into, and then out of, Bank Indonesia
Bank Indonesia
Bank Indonesia is the central bank of The Republic of Indonesia. Bank Indonesia is currently governed by Darmin Nasution, former interim governor. The last governor before the interim phase, Boediono, resigned due to his vice presidential candidacy in the Indonesian presidential election...
(now the central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of Indonesia). BRI gained its current name and status in 1992.
BRI was nearly unique in Indonesia in the East Asian financial crisis
East Asian financial crisis
The Asian financial crisis was a period of financial crisis that gripped much of Asia beginning in July 1997, and raised fears of a worldwide economic meltdown due to financial contagion....
of 1997, in that its operations were largely unaffected. This was because it had very little, if any, lending in foreign currencies or to the large corporations that had been borrowing heavily overseas, as most of the other large Indonesian banks had.
Since then BRI has been concentrating on increasing its core business and improving its risk management
Risk management
Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities...
practices. As part of the reformasi
Reformation (Indonesia)
The Post-Suharto era in Indonesia began with the fall of Suharto in 1998. Since then Indonesia has been in a period of transition. This era has been called the period of Reformasi...
(reform) process in Indonesia since 1998, the government has been steadily reducing its influence on the Bank's day to day operations, culminating in its IPO.
It is also seeking to comply with the Basel II
Basel II
Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision...
accords, as mandated by Bank Indonesia
Bank Indonesia
Bank Indonesia is the central bank of The Republic of Indonesia. Bank Indonesia is currently governed by Darmin Nasution, former interim governor. The last governor before the interim phase, Boediono, resigned due to his vice presidential candidacy in the Indonesian presidential election...
, by 2008.
During period of 2006-2011 its assets have jumped almost 62 percent. The bank topped the list of the nation’s most profitable banks for six years, recorded assets of Rp 249.56 trillion (US$28.6 billion) in 2010, up from Rp 154.72 trillion in 2006.