Layoffs at state banks to be decided this month<\/p>\n
JAKARTA (JP): Finance Minister Bambang Subianto said on
\nTuesday that the policy governing the fate of the thousands of
\nemployees of four state banks which are to be restructured and
\nmerged would be decided at the end of this month.<\/p>\n
He said that downsizing would be needed to boost the banks'
\nefficiency before they are brought together in the newly formed
\nbank.<\/p>\n
\"Personnel policy issues will be decided at the end of this
\nmonth,\" he told the House of Representatives commission VIII on
\nstate budget and finance during a debate on the 1999\/2000 state
\nbudget proposal.<\/p>\n
The government is planning to merge Bank Dagang Negara, Bank
\nPembangunan Indonesia, Bank Bumi Daya, and Bank Export Import
\nIndonesia into a newly established Bank Mandiri.<\/p>\n
The four ailing banks have a total workforce of more than
\n26,000, of which some 10,000 may be laid off.<\/p>\n
The government has admitted that the contentious issue of the
\nneed for massive layoffs from the ailing banks is slowing the
\nrestructuring effort of the four.<\/p>\n
The government plans to transfer the non-performing assets of
\nthe four banks into the asset management unit of the Indonesian
\nBank Restructuring Agency (IBRA).<\/p>\n
Bambang said that the bad loans of the banks would be
\ntransferred to IBRA at the end of this month, while the non-
\nperforming assets would be transferred at the end of March.<\/p>\n
He said that performing loans will be transferred to Bank
\nMandiri in June.<\/p>\n
He added because the four banks had poor capital adequacy
\nratios, Bank Mandiri will be recapitalized to boost it to the
\nprudential level.<\/p>\n
The four ailing banks have capital adequacy ratios of much
\nless than 25 percent.<\/p>\n
The government has said that the recapitalization of Bank
\nMandiri will be completed by the end of this year. (rei)<\/p>",
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