Bank Mandiri, the Indonesian state-owned bank, is to introduce a new “repatriation” banking product, in collaboration with Switzerland’s Lombard Odier, for Indonesians who have funds sitting in Singapore that they wish to bring back onshore, according to Indonesian media reports.
The new product will be formally announced on 16 April, according to a story on the website of The Jakarta Post today, which quotes as its source Kontan.co.id, an Indonesian-language media organisation.
Lombard Odier has a private banking outpost on Raffles Place in Singapore’s financial district, and has had a presence in the market since 2008, according to its website.
Lombard Odier officials were unable to provide any details about such a repatriation product “at this point”. A spokesperson with the bank said, however, that “discussions to form a strategic partnership in the area of onshore wealth management in Indonesia have progressed positively, and we will provide details when we make a formal announcement on 16 April”.
‘Mutual fund with underlying assets’
According to The Jakarta Post, Bank Mandiri small business and network director Hery Gunardi told kontan.co.id that the new Lombard Odier product had been conceived as a “form of a mutual fund with different underlying assets”.
As reported, Indonesia was one of a number of countries that introduced major tax amnesties in 2016, ahead of the implementation of the Common Reporting Standard, which is introducing bringing in automatic bank information sharing around the world over the next few years.
According to The Jakarta Post, “as much as Rp 4.88 quadrillion (US$341.6bn) in asset value was declared during the nine-month tax amnesty” last year, but only Rp 147trn was repatriated. Most of the money that remained offshore is said to have been parked in Singapore, which has long been one of Asia’s top banking centres and has even been called the “Switzerland of Asia” for its popularity as a trusted banking jurisdiction.