Govt to wrap up Global's unfinished business<\/p>\n
Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
An important final step in the shutdown of fraud-riddled Bank
\nGlobal International has ended, with the government finishing its
\nverification of the bank's depositor accounts, and honoring 79
\npercent of them, or 5,213 accounts worth Rp 818.9 billion (some
\nUS$83 million) under its blanket guarantee scheme.<\/p>\n
Some 1,485 accounts worth Rp 778.2 billion will however be not
\nbe paid out, the finance ministry's Director General for
\nFinancial Institutions Darmin Nasution announced on Thursday, as
\nthe Finance and Development Comptroller (BPKP) has found them
\nlinked to the fraud that had caused Bank Global to collapse.<\/p>\n
Explaining the final verification, Darmin said that the BPKP
\nhas concluded its validation of a remaining 1,888 accounts, which
\nhad been left for further examination after the last verification
\nin April. The accounts were set aside because auditors were
\nsuspicious that they were fictitious; used by Bank Global's
\nmanagement in illegal "overdrafting" -- transferring numerous
\nfunds into bogus accounts.<\/p>\n
"Another 553 savings accounts worth Rp 142.31 billion and one
\nnon-savings account worth Rp 5.2 million will also be covered,
\nDarmin said.<\/p>\n
This means a total of Rp 793.44 billion in 5,146 savings
\naccounts and Rp 25.46 billion in 67 non-savings accounts will be
\ncompensated under the blanket guarantee scheme, while a total of
\nRp 274.5 billion in 1,362 savings accounts and Rp 503.67 billion
\nin more than 123 non-savings accounts -- which include sub-debt
\nbonds and mid-term notes -- will not.<\/p>\n
The BPKP and UP3 had received data of 9,872 accounts worth Rp
\n1.25 trillion from Bank Global's management for verification.<\/p>\n
The finance ministry's blanket guarantee implementation unit
\n(UP3), Darmin said, would start payments through selected BNI
\nbranch offices on Aug. 3.<\/p>\n
Under the scheme, the government must cover all banking
\nobligations to customers -- pending verification -- whenever the
\nauthority closes down a bank.<\/p>\n
Darmin said a team of banking legal experts the government had
\nconsulted with on the case had concluded that the bank's
\nmanagement had used at least three "overdrafting" bank fraud
\nmethods, in which several depositors were found to have been
\ninvolved.<\/p>\n
"However, to fulfill the sense of justice of some depositors
\ninsisting they had nothing to do with the case, we have decided
\nto take this matter to the President for further advice," Darmin
\nsaid. He reiterated that the government would take legal action
\nagainst anyone involved in the fraudulent practices in Bank
\nGlobal.<\/p>\n
Bank Indonesia officially closed down Bank Global on Jan. 13
\nbecause of its dire financial situation and overt evidence of
\nfraud in the institution.<\/p>\n
Since the 1997 financial crisis, the cash-strapped government
\nhas guaranteed all deposits -- using state funds -- to ensure
\npublic trust was kept in banks, despite the still emerging cases
\nof internal bank fraud.<\/p>\n
The government plans to establish a Deposit Insurance Agency
\nin September, requiring all banks to pay a fee of 2 percent to
\nfund the agency. By 2006, the fund will only guarantee an
\nindividual deposits amounting to a maximum of Rp 100 million.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-to-wrap-up-globals-unfinished-business-1447893297",
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"sponsor": "Okusi Associates",
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