UPDATE 1-Indonesian banking regulator says Sea Group's Shopee acquires Bank BKE

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JAKARTA, Feb 18 (Reuters) - Indonesia's Financial ServicesAuthority (OJK) said on Thursday that Sea Group'se-commerce arm Shopee had acquired local lender BankKesejahteraan Ekonomi (Bank BKE) with the aim oftransforming it into a digital bank.

OJK official Anung Herlianto said that Shopee, SoutheastAsia's largest e-commerce platform, has yet to make an officialapplication with the banking regulators to transform Bank BKEinto a digital institution, but they are "currently preparingthe infrastructure to do so."He told reporters that OJK was preparing regulations for newdigital banks, which would likely be released in mid-2021, butthat a digital lender like Bank BKE would be expected to prepare3 trillion rupiah ($213.64 million) in capital.

Sea, whose market capitalisation is $136.5 billion, was notimmediately reachable for comment. The Southeast Asiantechnology group is in the middle of a significant fintech pushthroughout the fast-growing region of 650 million people and wasgranted in December a full digital bank licence in Singapore.

Its biggest digital bank rival in Indonesia is likely to beJago, in which Indonesian payments and ride-hailing group Gojekowns a 22% stake.

Indonesia’s multi-billion digital financial services sectoris booming. Of the country’s population of 270 million, halflack bank accounts but most now have mobile phones.($1 = 14,042.0000 rupiah)(Reporting by Tabita Diela; Writing by Fanny Potkin; Editing byMartin Petty and Ed Davies)