JAKARTA (Feb 26): Indonesian President Prabowo Subianto launched two "bullion banks" on Wednesday that will provide gold deposit services to help keep stocks of gold onshore as the country looks to develop its commodity sector beyond mining. Southeast Asia's largest economy is one of the world's top gold producers, but Prabowo has said that a lot of gold mined in Indonesia ends up being held overseas.

At the launch, the president said bullion banks could help the state save foreign exchange by allowing the entire gold supply chain to stay onshore.

"Indonesia, we now have realised, is a rich country. It was said that our gold production has risen from 100 (metric) tonnes to 160 tonnes now," Prabowo said.

"And now, we will improve the ecosystem of services and we hope to accelerate deposits and increase our gold reserves," the president said.

Jakarta has approved licences to operate as a bullion bank for Pegadaian, a pawnshop subsidiary of state lender Bank Rakyat Indonesia, and Bank Syariah Indonesia (BSI), the country's largest Islamic bank.

Both can now offer gold deposit, financing, trading and custody services to customers.

Financial firms are required to have at least 14 trillion rupiah (US$850 million or RM3.7 billion) in capital if they want to become a bullion bank, according to regulations on bullion businesses.

Uploaded by Magessan Varatharaja