Urip Hudiono and Yuli Tri Suwarni, The Jakarta Post, Bandung
Some 9.7 million bank accounts have in the past three months been closed or been emptied of funds, the National Development Agency (Bappenas) has found, raising alarm bells for the country's banking sector and the economy as a whole.
The data, which Bappenas compiled from figures produced by the Deposit Insurance Agency (LPS), referred mostly to accounts containing deposits of under Rp 100 million (some US$11,000) -- not surprising given that the LPS recently lowered the upper deposit-guarantee ceiling to Rp 100 million.
The Bappenas director for financial institutions and monetary analysis, Sidqy Lego Pangestu, said that he was still investigating the cause of the phenomenon, and whether it would have an adverse impact on the economy.
"There are several possibilities," he said earlier this week at an economics seminar in Bandung. "It could mean that people with savings of under Rp 100 million are getting poorer because their savings are being spent on their everyday needs, or it could be because they have no jobs or regular income, or because of a disaster, or the stagnant situation in the real sector."
Sidqy admitted that Bappenas had no data on whether such a phenomenon had occurred before, or how much the money from the closed accounts amounted to.
However, senior LPS official Firdaus Djaelani dismissed worries about the phenomenon, saying that the closed accounts were mostly held with Bank Rakyat Indonesia (BRI).
BRI, he said, had reported to the agency that it had closed a large number of inactive accounts, and expunged them from its records.
The amount of money was also insignificant, he said, adding that the closing of the accounts had nothing to do with the lowering of the LPS's guarantee ceiling.
"Many of the accounts were probably opened just as formal prerequisites to obtain loans from the bank," Firdaus said. "I think it would be too hasty to jump to any conclusions that it is related to lower purchasing power on behalf of the public."
However, Sidqy pointed to a Central Statistics Agency (BPS) report that showed that 1.7 percent of bank accounts in Indonesia accounted for 80 percent of the country's deposits, a finding that has been backed up by the LPS.
According to Sidqy, this reflected the gaping disparities in the economy, and could represent a time bomb for the banking sector should problems in the industry and the economy result in a run on funds.
Another problem looming on the horizon for the banking industry, he said, was the significant amount of undisbursed loans, which had risen to Rp 179 trillion at present from Rp 160 trillion at the end of last year, or a fifth of total lending, which in 2006 grew by a less-than-expected 14 percent to Rp 792.3 trillion.
"Policies should, therefore, be more pro-business in terms of tax incentives, regulations, and the time needed to obtain business permits," Sidqy suggested, to remedy the current situation where many businesses are reluctant to take out loans due to the high risks involved, despite recent improvements in the macroeconomic situation.