BI to fine banks that refuse risk management plan<\/p>\n
Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
Bank Indonesia (BI) will impose a fine of Rp 1 million (US$117)
\nper day on any bank that has not submitted their risk management
\naction plan to the central bank yet, a BI official said.<\/p>\n
"BI will also hold the banks' board of directors responsible
\nif the banks then get into financial trouble due to the lack of a
\nrisk management policy," BI second deputy director for bank
\nsupervision Aris Anwari said on Wednesday, at the sidelines of a
\nseminar on the prevention of banking fraud.<\/p>\n
Asri explained that the central bank had issued a regulation
\nlast year requiring all banks in the country to implement a risk
\nmanagement policy, in order to prevent banking scams.<\/p>\n
"BI issued the regulation in May last year, and has been
\ncalling on all banks to comply ever since," he said.<\/p>\n
Following the recent lending scandals befalling Bank Negara
\nIndonesia (BNI), and Bank Rakyat Indonesia (BRI), BI has stepped
\nup compliance of the regulation by requesting all banks to submit
\ntheir risk management action plans by March.<\/p>\n
"Of the 28 banks under my supervision, all of them have
\ncomplied with the deadline, including major banks, Bank Danamon
\nand Bank Central Asia (BCA)," Asri said.<\/p>\n
Asri, however, did not explain the status of other banks not
\nunder his supervision. There are about 130 banks in the country
\nat present.<\/p>\n
Asri further explained that according to the regulation, BI
\nhad also set a target for all banks in the country to have
\nimplemented a risk management policy by December this year.<\/p>\n
"All banks should therefore start implementing a risk
\nmanagement policy accordingly for their assets and operations to
\nmeet the target," Asri said.<\/p>\n
"Small banks, with assets up to Rp 100 billion, should at
\nleast implement risk management for their lending procedures,
\nmarket, liquidity and operations," he continued.<\/p>\n
As for banks with larger assets, Asri suggested that they also
\nimplement additional risk management policies, factoring in all
\nlaws and regulations, as well as a company strategy and
\nreputation.<\/p>\n
"Risks towards company reputation include customer complaints
\nof the bank's service," he said.<\/p>\n
Last October, state-owned BNI was hit by a letter-of-credit
\nscandal, resulting in a potential losses of Rp 1.2 trillion for
\nthe bank.<\/p>\n
State-owned BRI was then struck by a similar scandal. BRI was
\nhit by a loan scam resulting in potential losses of Rp 297
\nbillion.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-to-fine-banks-that-refuse-risk-management-plan-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}