Mochtar blasts BI's bank rescue policy<\/p>\n
JAKARTA (JP): Mochtar Riady, a senior executive of a major
\nbusiness group, said here yesterday that Bank Indonesia's policy
\nof rescuing the country's ailing banks may only worsen the state
\nof the banking sector.<\/p>\n
Mochtar, founder and chairman of the Lippo Group which
\nincludes one of the largest banks in the country, said the
\ncentral bank's program to strengthen domestic banks only catered
\nto banks which already had acute problems.<\/p>\n
\"Ironically, banks with problems are taken care of and rescued
\nbut those that are healthy and are not under IBRA (the Indonesian
\nBank Restructuring Agency) are being neglected,\" he said at a
\nmeeting with leading members of the Chamber of Commerce and
\nIndustry (Kadin).<\/p>\n
IBRA was set up by the government in January to restructure
\nthe banking sector, and is currently overseeing 54 banks,
\nincluding seven that were suspended last April.<\/p>\n
Mochtar said Bank Indonesia (BI) only acted as the lender of
\nlast resort to help banks when the banks suffered problems in
\ntheir clearing operations.<\/p>\n
Banks with positive accounts, however, were ignored and they
\nwere even not allowed to cash in their deposits at the central
\nbank when they needed them, he said.<\/p>\n
He cited the recently rocked Bank Central Asia (BCA),
\nIndonesia's largest private bank, as an example of a bank that
\ncould have been saved had BI stepped in to help it earlier, he
\nsaid.<\/p>\n
\"The central bank's policy did not help save BCA at a time
\nwhen the bank was vulnerable to rumors that were \"engineered\" to
\nshake it so that BCA had to restrict withdrawal amounts, he said.<\/p>\n
\"Why did BCA not get rescued before the situation got so bad?\"
\nhe asked, adding: \"I'm sure that the BCA's turmoil was
\nengineered.\"<\/p>\n
But he said he did not know who could have been behind the
\nscenes, saying they must have been \"people who want to see the
\neconomy collapse\".<\/p>\n
Mochtar, a former president of BCA, said many of the people,
\nwho formed long queues at BCA's Automatic Teller Machines in the
\nbeginning only withdrew small amounts of money.<\/p>\n
The appearance of a bank rush from these long lines triggered
\npanic among other customers who then began rushing to the bank,
\nhe said.<\/p>\n
The management of the country's largest bank was taken over by
\nIBRA last month, following massive withdrawals by customers which
\ncontinued for a week after former president Soeharto stepped down
\non May 21.<\/p>\n
The Salim Group owns 70 percent of the bank, while Soeharto's
\nchildren Sigit Hardjojudanto and Siti Hardijanti Rukmana own the
\nremaining 30 percent.<\/p>\n
Mochtar also said the restructuring of the banking industry
\nwas crucial to the survival of the private sector.<\/p>\n
The current tight monetary policy had suffocated the country's
\nprivate sector and it would cause many companies to go bankrupt,
\nhe said.<\/p>\n
Also attending yesterday's meeting was economists Sjahrir, Sri
\nMulyani and Pande Radja Silalahi, and the chairman PT Jamu Jago,
\nJaya Suprana. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mochtar-blasts-bis-bank-rescue-policy-1447893297",
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