Bank liquidation not easy, says Soedradjad<\/p>\n
JAKARTA (JP): Liquidating ailing banks is not easy because it
\ninvolves many parties, Bank Indonesia Governor J. Soedradjad
\nDjiwandono said yesterday.<\/p>\n
Speaking before the monthly cabinet meeting on economic
\naffairs the governor reiterated that banks should be liquidated
\nif efforts to bail them out failed.<\/p>\n
\"If a bank is already in serious trouble, why not simply put
\nit into liquidation,\" Soedradjad said.<\/p>\n
\"However, the decision to liquidate a bank cannot be taken
\nhastily,\" he said.<\/p>\n
The Minister of Finance, Mar'ie Muhammad, said Tuesday the
\ngovernment would not hesitate to liquidate banks in a bid to
\nstrengthen the banking industry.<\/p>\n
He said the government had the right to liquidate banks as
\nstipulated in the government regulation on bank liquidation.<\/p>\n
Problem banks, if allowed to continue operating, could hinder
\nthe growth of the banking industry, Mar'ie said.<\/p>\n
The minister agreed liquidation should be the last resort.<\/p>\n
Before liquidating a bank everything must be taken into
\naccount, including small depositors' interest, Soedradjad said.<\/p>\n
The governor cited the problems involved in liquidating Bank
\nSumma to show the complexity of the liquidating a bank. The bank
\nis still being liquidated.<\/p>\n
Bank Summa, which was owned by the Soeryadjaya family, was
\nclosed in 1992 because of US$500 million in bad loans.<\/p>\n
Soedradjad refused to say how many banks were in danger of
\nbeing liquidated and rejected rumors the central bank would
\nliquidate 24 banks.<\/p>\n
\"That's not correct. I don't know where they got that figure,\"
\nhe said.<\/p>\n
Indonesia is believed to have about 11 banks in serious
\nfinancial trouble.<\/p>\n
Soedradjad said last December's liquidation ruling was not
\nformulated because of the emergence of financially troubled
\nbanks.<\/p>\n
It was introduced because there was no ruling governing bank
\nliquidation. Before the new regulation, bank liquidation was
\nbased on commercial law from the colonial era which did not
\nrecognize depositors or differentiate between small and big
\ndepositors. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bank-liquidation-not-easy-says-soedradjad-1447893297",
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