Mar'ie wants govt to close ailing banks<\/p>\n
YOGYAKARTA (JP): Former finance minister Mar'ie Muhammad urged
\nthe government yesterday to close down ailing banks which could
\nno longer be maintained without further financial help.<\/p>\n
\"Banks which are in the worst shape are better off closed.
\nTheir assets could be given to state banks,\" Mar'ie told a
\nsymposium of economic students at Yogyakarta's Gajah Mada
\nUniversity.<\/p>\n
\"If the government continues to help them, it would be a waste
\nof public funds, when money for food supplies is more pressing
\nright now,\" he said.<\/p>\n
Mar'ie, who has become a staunch government critic since he
\nleft his ministerial post in March, said the government must also
\nbegin nationalizing some troubled banks to avoid a collapse in
\nthe banking industry.<\/p>\n
He said the government had put a lot of money into the ailing
\nbanks.<\/p>\n
The government, through the Indonesian Banking Restructuring
\nAgency (IBRA), has injected Rp 102.5 trillion (about US$10.25
\nbillion) into ailing banks as of May 22 since its establishment
\nin January, according to Bank Indonesia, the central bank.<\/p>\n
\"Don't close the door on the possibility of nationalizing the
\nbanks, like those which have had massive runs on them but which
\nare still relatively healthy,\" he said.<\/p>\n
But the government must be cautious in determining which banks
\nare still healthy, which need to be nationalized and which are no
\nlonger salvageable, he said.<\/p>\n
\"Like a dying person, some troubled banks can no longer be
\nworked on by being placed in intensive care when they are
\neventually going to die anyway,\" he said.<\/p>\n
Hordes of customers of the country's largest private bank,
\nBank Central Asia (BCA), have been withdrawing their money,
\nfollowing three days of riots two weeks ago which severely
\ndamaged many of its branches and automatic teller machines.<\/p>\n
Yesterday IBRA took over the control of BCA, owned by the
\ngiant Salim Group and two of Soeharto's children, after financial
\nassistance from both owners and the central bank failed to calm
\njittery depositors.<\/p>\n
Earlier this year, IBRA shut down seven commercial banks and
\nplaced another seven under its management, including large Bank
\nDanamon and Bank Dagang Nasional Indonesia,<\/p>\n
Later, 26 other banks were put under its supervision as part
\nof efforts to overhaul the country's frail banking sector.<\/p>\n
Earlier in his speech, Mar'ie called on intellectuals,
\nespecially the campus community, to keep alive the campaign for
\noverall reform because the drive was in danger of being shattered
\nby vested groups with their own agenda.<\/p>\n
\"We should keep up the momentum for reform, otherwise the new
\nadministration will be able to establish a power base and
\nmaintain the status quo,\" added Mar'ie, who was known as
\n\"Mr.Clean\" in the 1993\/1998 Cabinet. (23\/das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/marie-wants-govt-to-close-ailing-banks-1447893297",
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