IBRA pays Rp 25.84t in guarantee fund<\/p>\n
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
\nhas paid out some Rp 25.84 trillion (US$3.11 billion) since the
\ngovernment's guarantee scheme for the obligations of commercial
\nbanks began in early 1998.<\/p>\n
IBRA deputy chairman Jerry Ng said on Tuesday about Rp 21.04
\ntrillion was used to repay depositors money in closed down banks,
\nRp 4.20 trillion to cover interbank transactions, Rp 363.05
\nbillion to cover trade financing and Rp 263.49 billion for
\nforeign commercial borrowings and remittance.<\/p>\n
\"The amount of guarantee funds already paid by IBRA as of July
\n31, 2000, reached Rp 25.84 trillion,\" Jerry said during a media
\nconference.<\/p>\n
\"The greatest benefits of the government guarantee scheme are
\nenjoyed by the general public, namely the 1.6 million
\ndepositors,\" he added.<\/p>\n
The government launched the guarantee program to help revive
\nconfidence in the banking industry following the closure of some
\n16 banks in November 1997, which triggered massive runs and a
\nhalt in international credit lines.<\/p>\n
Under the scheme, the government guarantees the obligations of
\nclosed down banks to depositors and creditors, both domestically
\nand overseas.<\/p>\n
Since the financial crisis first struck in the middle of 1997,
\nthe government has closed down some 66 commercial banks in a bid
\nto restructure the ailing banking industry.<\/p>\n
The government guarantee scheme came into effect on Jan. 26,
\n1998, and was originally planned to run through Jan. 31, 2001.<\/p>\n
However, IBRA must make an announcement six months prior to
\nthe guarantee scheme being ended. Since no announcement was made
\nin August, the guarantee program will continue beyond this
\ninitial deadline.<\/p>\n
Jerry said the guarantee funds provided by IBRA were based on
\nPresidential Decree No. 26\/1998, which was followed up by the
\nissuance of two decrees by the finance minister.<\/p>\n
The guarantee funds from IBRA do not include the emergency
\nfunds injected by Bank Indonesia into ailing banks. The central
\nbank has issued some Rp 144.5 trillion in emergency liquidity
\nsupport to 48 commercial banks, to help them cover mass
\nwithdrawals by panicked depositors.<\/p>\n
But a recent investigative audit by the Supreme Audit Agency
\n(BPK) revealed more than Rp 138 trillion of the emergency loans
\nhad been misused by the bankers. BPK placed part of the blame for
\nthis misuse on the weak supervision of the central bank.<\/p>\n
The Attorney General's Office is currently investigating the
\nalleged abuse of the liquidity support.<\/p>\n
Attorney General Marzuki Darusman said recently that in the
\nfirst stage, the investigation would focus on 10 banks. He also
\nsaid there had been efforts by some bank owners to destroy
\nevidence.(rei)<\/p>",
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