IBRA to deal with interbank claims: BI<\/p>\n
JAKARTA (JP): Bank Indonesia Governor Sjahril Sabirin said on
\nMonday the central bank would no longer be involved in the
\nprocess of verifying interbank claims guaranteed by the
\ngovernment.<\/p>\n
He said the verification would be the sole responsibility of
\nthe Indonesian Bank Restructuring Agency (IBRA).<\/p>\n
\"Based on our discussions with IBRA, we have temporarily
\nagreed that it (the verification) will be the sole responsibility
\nof IBRA,\" Sjahril told reporters after a meeting with House of
\nRepresentatives leaders.<\/p>\n
Sjahril said that IBRA could ask a third party to help in the
\nverification process, depending on the capacity of the agency's
\nhuman resources.<\/p>\n
The government launched a blanket guarantee program early last
\nyear whereby all obligations of closed down banks, including
\ndeposits and interbank claims, were fully guaranteed by the
\ngovernment.<\/p>\n
Bank Indonesia and IBRA were given the authority to verify
\nclaims on closed down banks.<\/p>\n
The blanket guarantee program was launched in a bid to prevent
\na complete breakdown of the country's banking system as
\nconfidence in the industry plunged to its lowest point last year.<\/p>\n
But the outbreak of the high profile Bank Bali scandal in the
\nmiddle of this year showed that the blanket guarantee program was
\nprone to abuse by both the country's banking authorities and
\npoliticians.<\/p>\n
The Bank Bali scandal centers on the transfer of some Rp 546
\nbillion from the bank to PT Era Giat Prima (EGP) as a commission
\nfor the private firm to help the bank in recouping some Rp 904
\nbillion in interbank claims on a closed down bank.<\/p>\n
The government has insisted that Bank Bali didn't have to use
\nthe services of EGP because the claims were guaranteed by IBRA, a
\nunit of the finance ministry.<\/p>\n
The PricewaterhouseCoopers audit on the scandal concluded that
\nthere were indications of \"fraud\" and \"corruption\" in the Bank
\nBali-EGP transaction.<\/p>\n
The report, released to the public recently, named several top
\nbanking authorities, including IBRA and Bank Indonesia officials
\nand influential businessmen allegedly involved in the scandal.<\/p>\n
The report also found irregularities in the processing of Bank
\nBali's inter-bank claims by IBRA and Bank Indonesia and
\nrecommended further investigations of Sjahril and former finance
\nminister Bambang Subianto.<\/p>\n
IBRA has suspended payment of interbank claims on closed down
\nbank following the Bank Bali scandal, pending the completion of
\nan independent audit by Ernst & Young on the agency's process of
\nsettling inter-bank claims owed by closed banks.<\/p>\n
The international auditor is expected to shortly complete its
\naudit on some Rp 15 trillion in interbank claims on closed down
\nbanks.<\/p>\n
Legislators and several economists have called on the
\ngovernment to exclude interbank claims from the government
\nblanket guarantee program due to the possible abuse.<\/p>\n
Assets shrinking<\/p>\n
Meanwhile, Bank Indonesia deputy governor Subarjo Joyosumarto
\ndismissed on Monday media reports that some of the assets of the
\n16 banks closed down by the government in November 1997 had
\n\"disappeared.\"<\/p>\n
Speaking to reporters after accompanying Sjahril to the
\nmeeting with the House leaders, Subarjo said that the liquidation
\nteam was still working on how to recover the assets of the closed
\nbanks, estimated at Rp 13.8 trillion.<\/p>\n
\"It's not true. I don't know where the news came from,\" he
\nsaid, dismissing reports that the assets had \"evaporated\" and
\nBank Indonesia should be responsible.<\/p>\n
Subarjo said that so far the liquidation team had recovered
\nsome Rp 2.8 trillion from the sale of assets.<\/p>\n
He said that some Rp 11.5 trillion of the assets were in the
\nform of loans.<\/p>\n
He admitted that recovering the loans was difficult because
\nselling the collateral amid the current weak economic condition
\nwould only get fire-sale prices.<\/p>\n
\"Until now, the liquidation team has reported monthly,\"
\nSubarjo added. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ibra-to-deal-with-interbank-claims-bi-1447893297",
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