Govt shuts 16 banks in first reform move<\/p>\n
JAKARTA (JP): The government closed 16 ailing private banks
\nyesterday as part of the International Monetary Fund's reform
\npackage to restore confidence in the country's economy.<\/p>\n
The government assured that small depositors -- those who have
\nless than Rp 20 million -- would be reimbursed of their funds
\nfrom one of the state banks. Bank Negara Indonesia, Bank Rakyat
\nIndonesia and Bank Dagang Negara have been appointed to make
\npayments to these depositors starting on Nov. 13.<\/p>\n
Big depositors and other creditors will have to wait until the
\nbanks have liquidated their assets and paid off their tax
\nobligations to the state before settlements can be reached.<\/p>\n
Minister of Finance Mar'ie Muhammad announced the bank
\nclosures at the State Secretariat, saying the move should improve
\nthe country's banking system.<\/p>\n
\"This is part of the government's efforts to revitalize our
\nfinancial sector,\" he said.<\/p>\n
The action followed consultations with the IMF, the World Bank
\nand the Asian Development Bank (ADB), he said.<\/p>\n
The three institutions along with several foreign donor
\ngovernments have committed more than US$30 billion in assistance
\nto help the ailing Indonesian economy.<\/p>\n
The financial and banking sector was one of the key areas in
\nthe government's reform package announced Friday after two weeks
\nof tough negotiations with the IMF team.<\/p>\n
Present at yesterday's announcement were Minister\/State
\nSecretary Moerdiono, Bank Indonesia Governor J. Soedradjad
\nDjiwandono and Minister of Industry and Trade Tunky Ariwibowo.<\/p>\n
Soedradjad said the financial conditions and business
\ndevelopment of the banks had been determined to be unhealthy.<\/p>\n
\"These banks are insolvent to the point of endangering their
\ncontinuity, disturbing the overall banking system and harming the
\npublic interests,\" he said.<\/p>\n
Several banks closed were owned by politically connected
\nbusiness figures. Bank Industri was controlled by Hashim
\nDjojohadikusumo of the Tirtamas Group and Bank Rakyat Indonesia;
\nBank Andromeda was owned by Prayoga Pangestu of the Barito
\nPacific; Bank Pacific by Ibnu Sutowo, former president of state-
\nowned oil firm Pertamina; and Bank Jakarta by Probosutedjo, half-
\nbrother of President Soeharto.<\/p>\n
Soedradjad said the government was providing Rp 2.3 trillion
\nto help pay minor depositors.<\/p>\n
These, he said, accounted for 93.7 percent of all depositors
\nin the 16 banks, but only 15 percent of third party funds in the
\nbanks.<\/p>\n
The government would not provide bridging finance for
\ncreditors, such as other banks or holders of commercial papers
\nissued by the liquidated banks. These would be paid from proceeds
\nfrom sales of the banks' assets, he said.<\/p>\n
People or institutions who owed money to the dissolved banks
\nmust fulfill their obligations or face legal action if they
\nrefused to pay, Soedradjad said.<\/p>\n
Rumors of impending liquidation have been circulating through
\nthe country for the past week, with speculation focusing on
\ntroubled banks.<\/p>\n
Sources close to the negotiations said the IMF had insisted on
\na longer list of banks -- some said 23 and others claimed 19 --
\nbut the others were removed following eleventh-hour bailout.<\/p>\n
Mar'ie said the government is asking shareholders of the banks
\nto liquidate the assets and assume all responsibilities arising
\nfrom the liquidation process.<\/p>\n
\"Owners or shareholders and management teams of the closed
\nbanks are asked not to leave Indonesia, in order to complete the
\nliquidation process,\" he said.<\/p>\n
Moerdiono said owners and shareholders must be held
\nresponsible for all consequences that would arise. \"That's only
\nfair. When their banks made profits, they enjoyed the fruits; now
\nthat the banks suffer losses, it's only right that they should
\nbear the losses.\"<\/p>\n
Soedradjad called on the public to remain calm.<\/p>\n
He said a joint team from the central bank, the Ministry of
\nFinance, the Attorney General, the National Police and the
\nMinistry of Manpower would handle all matters arising from the
\nbank liquidations.<\/p>\n
Bank Indonesia has also opened an Internet website
\n(http:\/www.bi.go.id at what's new menu) to provide real time
\ninformation on the process of the liquidations.<\/p>\n
Police are on alert for possible massive panic.<\/p>\n
Jakarta Police Spokesman Lt. Col. E. Aritonang said the city
\npolice were ready to handle the situation.<\/p>\n
\"We are offering mediation services for both the banks and
\ncustomers to solve any possible disputes arising,\" he said.<\/p>\n
Aritonang said the public, especially bank depositors, should
\nnot to be influenced by malicious rumors.<\/p>\n
\"If you need information, call Bank Indonesia or the nearest
\npolice precinct,\" he said.<\/p>\n
News of the liquidation was taken on the chin by some
\ndepositors, but was met with anger by others.<\/p>\n
Bank Indonesia said minor depositors should go to their banks
\nto sort out administrative issues before they could claim their
\nmoney from the appointed state banks.<\/p>\n
Dita Daniswira, a 22-year-old student who has Rp 5 million in
\nBank Pacific, said she was shocked to hear the news.<\/p>\n
\"I'm not looking forward to lining up at the bank on Monday.
\nI've got to prepare for the worst treatment from the bank
\nofficers,\" she said.<\/p>\n
Nikolas Simanjuntak, a lawyer in Jakarta who had a small
\nsavings account at the BHS branch in Bendungan Hilir, said his
\nfirst reaction was panic.<\/p>\n
\"I've been a BHS client for a long time.<\/p>\n
\"I still don't know how I will get my money back. I'll just
\nhave to go there and find out on Monday.\"<\/p>\n
Limin Sebayang, a farmer in Medan, said he had Rp 15 million
\nin the local branch of South East Asia Bank, which he saved to
\nfinance the schooling of his children.<\/p>\n
\"They (the bank) offered the highest interest rates.<\/p>\n
\"I tried to get all my money on Friday when I first heard the
\nrumors, but the bank was not giving out any money.<\/p>\n
\"I phoned Bank Indonesia (branch office in Medan) but it was
\nclosed for the weekend,\" Limin said.<\/p>\n
\"I just want to know when I will get my money back.\"<\/p>\n
Anton Lembong, a 27-year-old Jakarta businessman, said he
\ntried desperately to get his Rp 35 million from an account at
\nAndromeda Bank yesterday.<\/p>\n
\"At first, they refused without giving any reason. After I got
\nangry, one of the officers told me that the bank had run out of
\nmoney,\" Anton said, adding that he had chosen Andromeda because
\nthe bank was popular and his father had also used the same bank.<\/p>\n
\"Half of that money belongs to my business partner,\" he said.<\/p>\n
\"I'm ruined.\" (team)<\/p>\n
No. Liquidated Bank Paying Bank<\/p>\n
-----------------------------------------<\/p>\n
1. Bank Harapan Sentosa BRI<\/p>\n
2. Sejahtera Bank Umum BDN<\/p>\n
3. Bank Andromeda BNI<\/p>\n
4. Bank Pacific BNI<\/p>\n
5. Bank Astria Raya BDN<\/p>\n
6. Bank Guna Internasional BDN<\/p>\n
7. Bank Dwipa Semesta BNI<\/p>\n
8. Bank Kosagraha Semesta BRI<\/p>\n
9. Bank Industri BRI<\/p>\n
10. Bank Jakarta BDN<\/p>\n
11. Bank Citrahasta D. BNI<\/p>\n
12. South East Asia Bank BDN<\/p>\n
13. Bank Mataram Dhanarta BNI<\/p>\n
14. Bank Pinaesaan BNI<\/p>\n
15. Bank Anrico BRI<\/p>\n
16. Bank Umum Majapahit BDN<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/govt-shuts-16-banks-in-first-reform-move-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }