BI to issue new bank restructuring ruling<\/p>\n
JAKARTA (JP): Bank Indonesia Governor Sjahril Sabirin said on
\nWednesday that the central bank was designing a new policy aimed
\nat accelerating the restructuring process of the country's ailing
\nbanking sector. Bank Indonesia supervises the country's banking
\nindustry.<\/p>\n
Sjahril said that the new ruling would include measures to
\naccelerate the transfer of bad loans from recapitalized banks to
\nthe Indonesian Bank Restructuring Agency.<\/p>\n
\"The new ruling is expected to be completed before the end of
\nthis month,\" he told a small group of reporters.<\/p>\n
Sjahril said that the new ruling would allow the central bank
\nto surrender a healthy bank to IBRA to legally enable the latter
\nto seize the category five loans from a recapitalized bank.<\/p>\n
Sjahril said that the new ruling was not merely designed to
\nfacilitate the transfer of the remaining bad loans of the giant
\nstate-owned Bank Mandiri to the agency, but other qualified banks
\nas well.<\/p>\n
Bank Mandiri which was recapitalized by the government last
\nyear to boost its capital adequacy ratio (CAR) level to 12.44
\npercent has not transferred its remaining Rp 16.5 trillion in bad
\nloans to IBRA.<\/p>\n
But according to the existing ruling, a bank can legally
\ntransfer its bad loans if the debtors agree or if the bank is
\nunder the supervision of IBRA.<\/p>\n
The ruling also stipulates, that Bank Indonesia can only place
\na bank under IBRA supervision if its CAR level was below the 4
\npercent minimum requirement.<\/p>\n
The transfer of all bad loans of a recapitalized bank is
\ncentral to the restructuring of the bank as it will clean the
\nbalance sheet.<\/p>\n
The government has stipulated that banks joining the
\nrecapitalization program must transfer all of their bad loans to
\nIBRA.<\/p>\n
It's not clear why Bank Mandiri has not transferred all of its
\nbad loans. Last year the bank transferred some Rp 76 trillion in
\ncategory five loans to the agency.<\/p>\n
The government is scheduled to recapitalize more banks this
\nyear including the state-owned Bank Rakyat Indonesia (rei).<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-to-issue-new-bank-restructuring-ruling-1447893297",
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