The previous restriction concerning foreign investment in rural banks is no longer listed in the investment negative list (PR 49/2021). However, foreign investment in rural banks remains prohibited as per the Law on Banking and Sharia commercial banks.
"APPENDIX III - REGULATION OF THE PRESIDENT OF THE REPUBLIC OF INDONESIA NUMBER 49 OF 2021 CONCERNING AMENDMENT TO PRESIDENTIAL REGULATION NUMBER 10 OF 2021 CONCERNING THE INVESTMENT BUSINESS SECTOR
LIST OF BUSINESS FIELDS WITH CERTAIN REQUIREMENTS
- Conventional smallholder’s credit bank, Sharia smallholder’s credit bank [rural banks] [see 2019 restrictions below]: Open (without condition)[no longer listed][...]" (Presidential Regulation (PERPRES) No. 49 of 2021 Concerning Amendments to Presidential Regulation Number 10 of 2021 concerning Investment Business Fields [google translation])
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"CHAPTER IV - LICENSING, FORM OF LEGAL ENTITY, AND OWNERSHIP
Part One - Licensing [...]
Article 17
In order to obtain a business license as a Commercial Bank in the form of a joint venture bank, the requirements as referred to in Article 16 paragraph (3) and paragraph (6) must be met, as well as the provisions stipulated in a Government Regulation, which regulates:
a. the amount of permitted foreign ownership and management;
b. parties that are allowed to cooperate;
c. other matters which according to the Monetary Board need to be regulated in the interests of national development.
[...]
Article 20.
(1) A Branch Office, a sub-branch office, and a representative office of a Bank whose head office is domiciled overseas (foreign Bank), may only be established pursuant to a license granted by the Chairmen of Bank Indonesia.
(2) The establishment of a sub-branch office of a bank referred to in paragraph (1) shall be reported to Bank Indonesia.
(3) The requirements and procedures for the establishment of offices as referred to in paragraph (1) and paragraph (2) shall be provided in further detail in a Government Regulation.
(4) The requirements and procedures for the establishment of offices of a Commercial Bank as referred to in paragraph (1), paragraph (2), and paragraph (3) shall be stipulated by Bank Indonesia.
[...]
Part Three - Ownership
Article 22
(1) Commercial Banks can be established by:
a. Indonesian citizens;
b. Indonesian legal entity; or
c. Indonesian citizens and/or Indonesian legal entities with foreign citizens and/or foreign legal entities in partnership.
(2) Further provisions regarding the establishment requirements that must be met by the parties as referred to in paragraph (1) shall be stipulated by the Financial Services Authority.
Article 23
(1) Rural Banks can only be established and owned by Indonesian citizens, Indonesian legal entities whose owners are all Indonesian citizens, local governments, or can be jointly owned by the three of them.
[...]
Article 26
(1) Commercial Banks may issue shares through the stock exchange in Indonesia.
(2) Indonesian citizens, foreign nationals, Indonesian legal entities and/or foreign legal entities may purchase Commercial Bank shares that are sold based on the provisions referred to in paragraph (1).
(3) Foreign citizens and/or foreign legal entities may purchase Commercial Bank shares through the stock exchange, provided that they do not become a majority.
(4) Specifically for state-owned Commercial Banks, the issuance of shares as referred to in paragraph (1) can only be carried out without causing a change in the majority share ownership by the state.
(5) The implementation of the provisions referred to in paragraph (2), paragraph (3), and paragraph (4) shall be further regulated by a Government Regulation. [...]"(Law (No. 7 of 1992 on Banking, as amended [google translation])
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"Article 9
(1) Sharia Commercial Banks can only be established and/or owned by:
a. Indonesian citizens;
b. Indonesian legal entity;
c. Local government; or
d. Indonesian citizens and/or Indonesian legal entities with foreign citizens and/or foreign legal entities in partnership.
(2) Sharia Rural Banks can only be established and/or owned by:
a. Indonesian citizens and/or Indonesian legal entities wholly owned by Indonesian citizens;
b. Local government; or
c. two or more parties as referred to in letter a and letter b.
(3) The maximum ownership of Islamic Commercial Banks by foreign legal entities is determined in accordance with the provisions of laws and regulations in the field of investment. [...]" (Law Number 21 of 2008 concerning Sharia Banking, as amended [google translation])
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Previously
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"APPENDIX III - REGULATION OF THE PRESIDENT OF THE REPUBLIC OF INDONESIA NUMBER 44 YEAR 2016 CONCERNING LISTS OF BUSINESS FIELDS THAT ARE CLOSED TO AND BUSINESS FIELDS THAT ARE OPEN WITH CONDITION TO INVESTMENT - 
LIST OF BUSINESS FIELDS THAT ARE OPEN UNDER SPECIFIC CONDITIONS [...]
M. Banking Sector
- Conventional smallholder’s credit bank, Sharia smallholder’s credit bank [rural banks]: Domestic capital 100% [...]" (PRESIDENTIAL REGULATION OF THE REPUBLIC OF INDONESIA NUMBER 44 YEAR 2016 CONCERNING LISTS OF BUSINESS FIELDS THAT ARE CLOSED TO AND BUSINESS FIELDS THAT ARE OPEN WITH CONDITIONS TO INVESTMENT)
Presidential Regulation (PERPRES) No. 49 of 2021 Concerning Amendments to Presidential Regulation Number 10 of 2021 concerning Investment Business Fields [google translation]
Law (No. 7 of 1992 on Banking, as amended [google translation]
Law Number 21 of 2008 concerning Sharia Banking, as amended [google translation]
PRESIDENTIAL REGULATION OF THE REPUBLIC OF INDONESIA NUMBER 44 YEAR 2016 CONCERNING LISTS OF BUSINESS FIELDS THAT ARE CLOSED TO AND BUSINESS FIELDS THAT ARE OPEN WITH CONDITIONS TO INVESTMENT
[<a href="https://peraturan.bpk.go.id/Home/Details/168534/perpres-no-49-tahun-2021">PR49</a>],[<a href="https://peraturan.bpk.go.id/Home/Details/161806/perpres-no-10-tahun-2021">PR10</a>],[<a href="https://peraturan.bpk.go.id/Home/Details/46599/uu-no-7-tahun-1992">Law</a>],[<a href="https://peraturan.bpk.go.id/Home/Details/39655/uu-no-21-tahun-2008">Law</a>],[<a href="https://peraturan.bpk.go.id/Home/Details/40374/perpres-no-44-tahun-2016">PR44</a>]