Banking woes caused by poor integrity<\/p>\n
JAKARTA (JP): The lack of integrity of banking executives and
\nshareholders is the major cause of the country's banking crisis,
\nsays a former banking chief.<\/p>\n
Rachmat Saleh, a former governor of Bank Indonesia (the
\ncentral bank), said yesterday that bank executives often abuse
\nbanking norms for their own interests while their shareholders
\noften pressure their executives for such a purpose.<\/p>\n
\"It is a matter of poor integrity within the banking
\nmanagement,\" Rachmat, also a former trade minister, said at the
\nclosing of the Institute of Indonesian Bankers' special training
\nfor senior banking executives.<\/p>\n
The special training program was attended by 22 executives of
\nboth state and private banks.<\/p>\n
Rachmat, who is also deputy chairman of the institute's
\nnational council, said that it is high time for both bank
\nexecutives and shareholders to improve their professional
\nintegrity. Otherwise, the public will have no more confidence in
\nthe banking system.<\/p>\n
He did not mention specific banks in his statement but it was
\nobviously in reference to the country's state-owned banks, which
\nrecorded a great amount of bad debts over the past two years.<\/p>\n
The problem of the banking industry, he said, is also partly
\ncaused by \"over confidence\" on the part of bank executives
\nconcerning the country's economy and their clients.<\/p>\n
\"Bankers should have the capacity to forecast the economic
\noutlook as the business climate is not always rosy,\" he said.<\/p>\n
Rachmat, however, said that the decline in business
\nperformance has not been suffered only by Indonesian banks as the
\nsame phenomena of incurring losses, falls in profits and massive
\nwrite-off measures have also occurred in many overseas
\nbanks.(hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/banking-woes-caused-by-poor-integrity-1447893297",
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