As reported by Bloomberg’s Hidayat Setiaji and Sharon Chen, Indonesia may allow banks to own as much as 90 percent of commercial lenders, easing concerns on ownership caps that may affect acquisitions including DBS Group Holdings Ltd.’s bid for PT Bank Danamon Indonesia.

Bank Indonesia plans to announce the ownership rule before July, Deputy Governor Muliaman Hadad, who’s in charge of banking regulations, said in Jakarta after a speech today.

The ownership stake “could be that high,” Hadad said, responding queries from reporters on whether banks could own as much as 90 percent of local lenders. “Of course this will be on a very selective basis.”

The comment comes two months after Singapore’s DBS’s 66 trillion rupiah ($7 billion) bid for Danamon, which triggered proposals from Bank Indonesia’s officials to restrict the shareholding of local lenders by other financial institutions. The possible limit led traders to bet that the deal, Southeast Asia’s largest banking takeover, may unravel.

“There has been a lot of relatively negative news flow on Indonesia’s recent regulatory changes,” said Anand Pathmakanthan, a Singapore-based analyst at Nomura Equity Research who has a “buy” rating on DBS (DBS) shares. “So this could be a bit of a white flag, sort of a concession by Indonesian authorities to indicate to the market that they are open to foreign direct investments. Chances are definitely higher with this so-called concession.”

Indonesia’s parliament this week approved Hadad to head the board of a national financial regulator due to start operating in January 2013.

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