“Reclaiming” BCA: A Billion-Dollar Idea or a Billion-Dollar Mistake?
Behind the push to reclaim BCA lies a risky cocktail of legal uncertainty, political nostalgia, and market-moving consequences.
In a year where Indonesia is busy polishing its global investment image, launching Danantara, a brand-new sovereign wealth fund, and ushering in a new president, a relic of economic debate past has reemerged. The proposal? That the government should “take back” 51 percent of PT Bank Central Asia Tbk (BCA), the country’s most valuable, most systemically important private bank.
Not purchase it. Not litigate for it. Just take it.
This isn’t a rogue tweet or late-night op-ed. It’s a serious pitch from an economist who’s been championing this idea since the pandemic was still new. Now, it’s gaining traction with political factions like PKB and sympathetic ears in Komisi III, who argue the 2002 privatization of BCA was a historic injustice. The reasoning: recapitalization was funded by public money, therefore the public deserves the prize. Preferably without opening the state wallet.
Some even say BCA could be a tidy asset to top off Danantara’s balance sheet. Just sweep it in, like a forgotten gold bar in the garage.
It’s a compelling narrative. Emotional, nationalistic, and simple. Which, of course, makes it all the more important to look at it slowly and carefully.
BLBI: From Crisis Lifeline to Forever Talking Point
To grasp why anyone is even talking about “reclaiming” BCA in 2025, you have to go back to the economic chaos of 1997–98, when Indonesia’s banking system stood on the brink of total collapse. Banks were failing, depositors were panicking, and capital was fleeing faster than anyone could count it. The government, through Central Bank of Indonesia, stepped in with what became known as BLBI; a massive emergency liquidity program aimed at preventing the financial system from going up in flames.
This was not a bailout in the Wall Street sense. It wasn’t a blank check for oligarchs to keep their toys. It was about preventing systemic failure, protecting deposits, and making sure payments could still clear on Monday morning.
But once the fires were out, the government was left holding a bag full of bad debts. Enter Recapitalization Bonds (Obligasi Rekap or OR). These were government-issued instruments used to prop up banks' balance sheets. The state became the owner of once-private banks, including BCA, which had received some of the largest injections.
By 2002, BCA had been stabilized, recapitalized, and was majority-owned by the state. So IBRA put it on the market. It was sold to a consortium led by Farallon Capital Management and Djarum for Rp1,775 per share, significantly above the market price at the time and double the value fetched in a similar sale just one year earlier.
There was another bidder too: Standard Chartered. But they wanted to hold part of the payment in escrow and demanded multiple legal protections. The government, understandably cautious after five years of crisis, chose the cleaner, more straightforward offer.
Now, some say that was a bad deal. That the state should’ve held out longer, asked for royalties, or just kept the bank. They argue that because public funds were used to rescue BCA, the public should own it forever. It’s a passionate claim, but one that requires a selective memory. It skips the entire chain of events that led to the sale and conveniently forgets the fact that investors don’t typically pay full price for a fire-damaged house that hasn’t been fully rebuilt yet.
That’s the central flaw. This isn’t just a story of public money and private gain. Without the recap, there would be no BCA to reclaim. Without the sale, the state would still be managing a massive bank during the early 2000s with limited capacity and no guarantee of recovery. Seen in that light, the 2002 deal looks less more like a necessary resolution to a national crisis.
Facts, Inconvenient and Otherwise
Before we get carried away with slogans about national justice and reclaiming assets, it helps to sit down with the facts.
First, BLBI debt was not inherited by BCA’s eventual buyers. It was the responsibility of the previous owner (Salim Group), which ceded its control of BCA to the government as part of a settlement. Once those shares were handed over, the state became the legal majority shareholder. That meant it could dispose of the bank however it chose, assuming due process was followed. And it was. The sale process was managed by IBRA, monitored by international institutions like the International Monetary Fund, and reviewed by ministers. It wasn’t a back-alley transaction.
Second, the recapitalization bonds (OR) weren’t gifts. They were policy instruments used to stabilize the banking system. Without them, BCA would have been unsellable and possibly unrevivable. The presence of those bonds made the bank viable again, exactly the result the state intended.
Third, the sale itself was competitive. Two vetted bidders made it to the final round: Farallon–Djarum and Standard Chartered. SCB offered slightly more on paper but added conditions like escrow and legal safeguards. Farallon’s bid was cleaner and more straightforward. In crisis-tinged transactions, simplicity matters.
So if the entire argument for “reclaiming” BCA hinges on a Rp25 difference per share, we should probably ask whether that’s a hill worth climbing. Especially when the process followed the rules, the price exceeded market, and the buyer didn’t ask for insurance against ghosts in the closet.
What a Forced Takeover Would Actually Mean
Let’s indulge the hypothetical. Say the government wakes up tomorrow, decides it's had enough of “market-based nonsense,” and simply declares that 51 percent of BCA now belongs to the state. No court ruling. No shareholder agreement. Just a press statement.
Here’s what happens next.
First, the law shows up. Under Law No. 25 of 2007 on investment, expropriation is allowed only through formal legislation and must include compensation at market value. With BCA’s valuation north of Rp1,000 trillion, that means a bill of at least Rp500 trillion just to stay compliant. And that’s before the likely onslaught of international arbitration, should foreign shareholders decide their portfolios weren’t designed for surprise nationalizations.
Next, markets panic. Investors don’t typically enjoy watching governments seize shares in listed companies. Cue capital flight, bond sell-offs, currency pressure, and a round of awkward calls from rating agencies. Indonesia’s hard-earned status as a stable, rules-based economy would wobble... even fracture.
Then comes systemic risk. BCA runs one of the country’s largest retail and corporate banking platforms. Payroll systems, supply chains, consumer payments; so much flows through it that shaking its foundations could cause real economic disruption.
And finally, political aftershocks. No such move happens in a vacuum. Ministries like Finance, SOEs, and OJK would be dragged into damage control. Other emerging markets in the region would quietly thank us for the capital inflows.
Taking 51 percent of BCA by fiat would be an extraordinarily expensive, destabilizing, and legally fraught idea. You don’t seize half of the country’s most important financial institution and expect business as usual to carry on. Especially not when investors are watching.
If You Want Justice, Use the Law, Not a Bulldozer
Let’s assume that some believe the 2002 sale of BCA was flawed. Maybe they think the valuation was off. Maybe they suspect corners were cut. Maybe there’s a theory floating around that something improper happened behind closed doors. Fair enough. People are entitled to their suspicions.
But suspicions aren’t conclusions. That’s what courts are for.
If someone believes there was fraud, coercion, or breach of law in the BCA divestment, there’s a straightforward path forward: file a legal case. Present evidence. Ask the judiciary to weigh it. Indonesia has courts. It has audit institutions. It even has arbitration frameworks. That’s how a country with rule of law addresses grievances.
What you don’t do is wake up nearly a quarter-century later and decide the state should unilaterally seize a public company’s shares based on loosely defined notions of “fairness” or “national interest.” That may play well in soundbites, but it unravels investor confidence quickly. And it sends a message that decisions made by one government can be undone by another simply because the mood has shifted.
Economic justice isn’t about relitigating every old deal that later turned out to be profitable. If that logic holds, should we revisit Telkom Indonesia’s IPO because the share price has risen? Should PT Astra International Tbk be asked to retroactively share decades of dividends?
No economy can function like that. And Indonesia, as a G20 member with ambitions for greater investment, cannot afford to play fast and loose with legal certainty.
The true test of justice is whether it can stand within the system, not above it. Once you start using bulldozers where courts will do, it’s very hard to stop. And the damage doesn’t just fall on the target. It spreads.
There’s a reason some voices invoke 1965 when discussing the idea of “reclaiming” BCA. It marked an era where assets were seized with no legal framework, no compensation, and no thought to the longer-term consequences. The economy spiraled. Inflation soared. Foreign investors disappeared, and with them, the credibility needed to build.
In contrast, the 1997–2002 crisis was messy but instructive. The government responded through law, not decree. It created recapitalization tools, recovery institutions, and a path for privatization that, while imperfect, rebuilt trust. Indonesia saved its banking system and reintroduced itself to the global economy.
Calls to selectively undo one part of that system is about rewriting history to win today’s argument.
The idea of “reclaiming” BCA might feel emotionally satisfying, especially when framed as a corrective to old injustices. But there is a difference between restitution and reversal.
It’s one thing to question how things were done. It’s another to risk unraveling decades of stability for a symbolic gesture. If Indonesia values its future, it must choose predictability over performance politics.
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