63 rural banks cease operating<\/p>\n
YOGYAKARTA (JP): Sixty three secondary or rural banks, known
\nlocally as BPRs, have ceased operation, leaving Rp 300 billion
\n(US$40 million) of third party funds in question.<\/p>\n
Worse still, according to the Indonesian Secondary Banks
\nAssociation (Perbarindo), the government still does not know the
\nwhereabouts of the operators and owners of the 63 troubled banks.<\/p>\n
Perbarindo chairman Awet Abadi said here on Wednesday that his
\nparty would cooperate with Bank Indonesia (BI), Indonesia's
\ncentral bank, to help depositors get their money back from the
\ntroubled banks, which have not been officially shut down.<\/p>\n
\"We, together with BI, will find the operators and owners of
\nthese BPRs to demand they take responsibility,\" he told
\njournalists after opening Perbarindo's Yogyakarta chapter
\nmeeting.<\/p>\n
Perbarindo currently has 2,227 secondary bank members, with a
\ntotal of Rp 1.5 trillion in third party funds.<\/p>\n
The 63 troubled banks represent only 2.8 percent of the
\nexisting secondary banks, but depositors' money in these 63 banks
\naccounts for 20 percent of all funds held by secondary banks.<\/p>\n
Awet said that Bank Indonesia had wanted to help troubled
\nsecondary banks, however, most of the 63 troubled banks were
\ntotally insolvent and it would be futile to help them.<\/p>\n
\"Bank Indonesia has said that it is committed to helping
\ntroubled BPRs meet their obligations to depositors. But how could
\nit help them if it cannot find the (owners') addresses?\" he
\nasked.<\/p>\n
He added that BI, together with Perbarindo, would liquidate
\nthe assets of the troubled banks and repay depositors money. If
\nthe proceeds from the asset sales were not enough, BI would
\nprovide bridging finance.<\/p>\n
In a bid to improve confidence in local banks, the government
\nhas provided a blanket guarantee for money deposited in the local
\nbanking system.<\/p>\n
Awet said that Perbarindo, with assistance from BI, would help
\nits members improve their performances. All secondary banks would
\nbe audited to determine what steps were needed to assist the
\nbanks and return them to health.<\/p>\n
Meanwhile, the head of BI's Yogyakarta branch, Achil R.
\nDjajadiningrat, said the performance of secondary banks had been
\ndeteriorating due to the crisis.<\/p>\n
The combined assets of 65 secondary banks in Yogyakarta have
\nshrunk by 4.5 percent to Rp 83.37 billion as of the end of
\nSeptember. Third party funds held by these banks also dwindled by
\n12.1 percent to Rp 44.48 billion. (44\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/63-rural-banks-cease-operating-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}