Bank Indonesia warned of export credit scam<\/p>\n
JAKARTA (JP): Business analysts warned Bank Indonesia, the
\ncentral bank, yesterday to improve its control over the use of
\nits subsidized export credit facility and to impose stern
\npunishments against commercial banks found in violation of the
\nloan scheme.<\/p>\n
Rizal Ramli, an executive of an independent consulting agency,
\nsaid that stronger law enforcement is a prerequisite in dealing
\nwith the misuse of the loan scheme.<\/p>\n
The abuse of the export credit facility has been widely
\ndebated in local newspapers since early last month following the
\ndisclosure of bogus export documents allegedly issued by Detta
\nMarina, a Jakarta-based garment factory. Kim, the company's
\nowner, according to the press reports, used bogus export
\ndocuments to obtain credit export loans.<\/p>\n
The export credit facility, carrying subsidized interest
\nrates, was introduced by the central bank in the 1980s to support
\nexport-oriented companies. However, many exporters and commercial
\nbanks allegedly cooperate to issue cheap export credits by using
\nbogus exports.<\/p>\n
In obtaining the loan facility, an exporter should normally
\nsubmit export documents to a commercial bank, which will then
\napply for the loan facility from the central bank on behalf of
\nthe exporter. The central bank will then provide an export credit
\nfor the exporter through commercial banks.<\/p>\n
Rizal charged that the abuse of the cheap funding facility was
\nmade possible with the help of commercial banks, which help
\ndistribute the loans.<\/p>\n
\"It would not happen without collusion between commercial
\nbanks and exporters,\" he said about the export credit scams.<\/p>\n
Plot<\/p>\n
According to sources, Kim, who is now a target of an Attorney
\nGeneral's office investigation, had been plotting with a number
\nof commercial banks to illegally benefit from the subsidized
\nexport loans.<\/p>\n
Those banks, instead, used the low interest loans to
\nstrengthen their financing activities, rather than distributing
\nthem to exporters. Meanwhile, Kim, who provided bogus exports to
\nback up the special loan application, received a fee of between
\ntwo and three percent for his services from the banks.<\/p>\n
The sources said that a major private bank, for example,
\nallegedly obtained approval from the central bank to channel
\nexport credits of around US$100 million last year by illegally
\nusing fake export documents.<\/p>\n
Interest rates for the central bank's export loans are set at
\nlevels far lower than those charged by commercial banks on time
\ndeposits. By using the central bank's export loans for their
\nlending operations, commercial banks can, therefore, more than
\ndouble their interest income.<\/p>\n
Rizal, the managing director of Econit, an industrial and
\ntrade consulting agency, said yesterday the government should
\nalso reconsider assigning Societe General de Surveillance (SGS),
\nthe Geneva-based surveyor, to inspect Indonesia's imports at
\npoints of loading.<\/p>\n
\"The issuance of bogus export documents proved that SGS's work
\nwas not so effective,\" he told Antara news agency.<\/p>\n
He said that SGS's service is not only ineffective but also
\nvery expensive, adding that by abandoning the agency, the
\ngovernment could save over US$100 million per annum.<\/p>\n
In the period between August 1993 and January 1994 alone, the
\ngovernment paid at least $193 million to SGS, Rizal said. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bank-indonesia-warned-of-export-credit-scam-1447893297",
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