Bank Indonesia is keen to see consolidation reduce the country's 130-odd banks to 15.
Recent moves by Bank Indonesia were meant to restrict the availability of dollars in the country.
Bank Indonesia acting governor Anwar Nasution said the letter contained "no major changes" in monetary policy.
Bank Indonesia insists that local banks are in much better shape than they were seven years ago.
If so, Bank Indonesia may remain independently ineffective for a while longer.
Bank Indonesia, the central bank, expects its own deposit certificates to pay as low as 17% within nine months, depending on U.S. rates.
Bank Indonesia is more pragmatic than the Bank of Thailand, widening the rupiah's exchange rate trading band to 8% and ensuring more flexibility in monetary policy.
Bank Indonesia Deputy Director Yunita Resmi Sari said the central bank imposed a minimum down payment for car and motorcycle loans last year to limit banks' credit risk and to ease consumers' debt burden.
Bank Indonesia said last week it would boost dollar availability, but investors said they are nervous about trading the rupiah, or Indonesian stocks and bonds, given the difficulty of getting out of the currency.
But of those that chose the state banks, most went either to Bank Negara Indonesia or to Bank Rakyat Indonesia: the four banks that now comprise Bank Mandiri received few of the new customers.
The Monetary Authority of Singapore reiterated its May 21 statement, saying it and Bank Indonesia are exploring further access into each other's markets, while Bank Indonesia Gov. Agus Martowardojo said the bank's position was unchanged and that "reciprocal" treatment is one of the considerations to allow DBS buy a bigger take in the Bank Danamon.
Two conventional financial institutions, Bank Negara Indonesia and Bank IFI, have set up Islamic branches.
In 2009, the lender took on the largest economy in the region, Indonesia, when it bought Bank Internasional Indonesia, that nation's eighth-largest lender by assets.
Currently, PT Bank Negara Indonesia is the only Indonesian bank that has a full banking license in Singapore, which allows it to provide personal banking, trade finance and business loans.
Key state companies now have new CEOs, among them oil giant Pertamina, power monopoly PLN and Bank Nasional Indonesia.
And it put what may become the country's largest private bank, Bank International Indonesia, which just announced a major merger, on credit watch.
Also boasting high productivity, Bank Internasional Indonesia (No. 245), which has to make the most of its relatively small headcount - 5, 800 - spread among 170 branches.
He said that once a governor of the Bank of Indonesia was named as a suspect in a case that would proceed to the court, he should resign.
In a report this week, the World Bank says Indonesia faces many of the same problems encountered by transitional democracies in Eastern Europe, but fails to do much about it.
Founded in 1992, Bank Muamalat is Indonesia's first Islamic bank.
Among the rioters' targets in the past year have been branches of Bank Central Asia, Indonesia's largest private-sector bank.
Equally busy further south is the Indonesia Bank Restructuring Agency, which recently took control of seven more institutions.
Another Asia Foundation survey discovered that only 17% of SMEs have ever received a bank loan in Indonesia, largely because they have very little information about credit programs or they cannot complete the paperwork required to obtain a loan.
In a recent study, the World Bank calculated that in Indonesia it takes an average of 151 days to complete all the paperwork required to start a company, against 30 in Malaysia and eight in Singapore.
IMF, the World Bank and foreign governments, Indonesia has promised to stop subsidising the prices of a range of basic products.
Singapore's DBS Group has received approval to buy a 40% stake in Indonesia's Bank Danamon, more than a year after it launched a multi-billion dollar takeover bid.
Under Indonesia's new bank rules, DBS will also have to pass three financial tests over 18 months.
Last summer, when Indonesia's central bank started printing too much money, the rupiah started to slide.
Indonesia's central bank, for example, has stopped selling three-month notes, which yield-hungry foreigners were eagerly snapping up.
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