UPDATE 2-Indonesia fin min passes first hurdle to central bank
(Updates with decision, quotes from lawmakers)
* Long, difficult road ahead for central bank nominee
* Some lawmakers want president to nominate another candidate
* Lawmaker asks Martowardojo to step down as finance minister
JAKARTA, March 5 (Reuters) - Indonesia's finance minister passed his first hurdle on the road to become central bank governor on Tuesday, amid growing opposition over his candidacy that has raised concerns over the future management of Southeast Asia's largest economy.
President Susilo Bambang Yudhoyono's surprise decision to name his finance minister, Agus Martowardojo, as the sole candidate to head the central bank has worried some that Yudhoyono may be seeking someone more malleable to run the state coffers ahead of next year's elections.
The legislature's finance commission on Tuesday decided Martowardojo was eligible to face the fit and proper test, which he must pass to take over the governorship of Bank Indonesia (BI) from late May.
"The decision is that we will hold the fit and proper test and it will be scheduled," Vera Febyanthy, a commission member, told reporters on the sidelines of the meeting.
Yudhoyono made the surprise announcement on Feb. 22 that he wanted Martowardojo to run the central bank when the current governor's term ends in May. He has given no explanation for not seeking to extend Governor Darmin Nasution's term.
Nor has there been any explanation why the president wants to move Martowardojo out of the cabinet to take charge of monetary policy for Southeast Asia's biggest economy.
Several commission members want the president to nominate another candidate to weigh against Martowardojo.
"There are requests from some factions to have more than one candidate," Febyanthy said.
Harry Azhar Azis, a member of the commission, said he believed Martowardojo should step down as finance minister during the confirmation process.
"The problem is if he is not accepted by parliament his credibility will be questioned," Azis told reporters.
"When parliament summons him for the fit-and-proper test, I personally suggested Agus to resign as a finance minister."
The president had proposed Martowardojo for the job before, in 2008, but parliament rejected him, in a decision seen then as more related to politics than objections to Martowardojo.
"The person is capable but the problem is this (process) is political, so there are more considerations too," Emir Moeis, chairman of the financial commission, told reporters before Tuesday's meeting.
Some MPs have asserted that Martowardojo lacks monetary policy skills and have questioned the integrity of the former banker, who is highly regarded by many analysts.
Born in Amsterdam 57 years ago, Martowardojo has spent almost his entire career in the banking industry, culminating in his role as head of state-controlled Bank Mandiri, which he is widely credited as having turned around.
Martowardojo took over the finance ministry in May 2010 from Sri Mulyani Indrawati, effectively driven from office by a political and business elite upset with her tough stand against graft, frequently cited as the biggest drag on one of the world's fastest growing economies.
For all the speculation that Martowardojo is being sidelined, he denies he is being pushed out of his current job.
His only comments about his proposed move to the central bank have been to say he will watch inflation and also expects reciprocity with other countries in banking.
That appears to be a direct threat to the already long-delayed bid by Singapore's DBS Group Holdings $7.2 billion for Bank Danamon, unless the island neighbour changes policy and lets Indonesian banks operate there.
In his ministerial role, Martowardojo has been prepared to take on both foreign and politically influential domestic investors. Analysts point to his willingness to confront the Bakrie Group, whose head is also in charge of the powerful Golkar party, over the purchase of a stake in a major gold mine.
He opposed a project to build a bridge to join the islands of Sumatra and Java and which is thought to be something Yudhoyono had hoped would be a legacy of his 10 years in office.
(Additional reporting by Andjarsari Paramaditha; Editing by Simon Cameron-Moore and Richard Borsuk, Ron Askew)