Citibank Indonesia expects its international trade finance business will grow by 30 per cent this year as a result of the re-introduction of a requirement for letters of credit (L/Cs) to be used for certain commodity exports.

As of April 2015, Indonesian exports of four primary commodities: coal; palm oil and palm-kernel oil; oil and gas; and minerals, including tin must be made on L/C terms (DC World News, 16 February 2015).

Optimistic

Managing director and country head of transaction banking at Citibank Indonesia, Riko Tasmaya, said the bank was optimistic the regulation would provide the bank with an opportunity to grow its trade business despite weakening global commodity prices.

"The effect of the rule will not be significant immediately to our business, but we think that Indonesia's overall volume of export transactions will increase," he said.

Online platform

Riko expects the government's programme to boost infrastructure spending will also create demand for more export-import transactions.

Senior vice president and country trade head at Citibank Indonesia, Risman Firmansyah, said the bank would promote its services and products in trade business, mainly its online platform CitiDirect.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.