Selecting bank managers<\/p>\n
History has taught us that the collapse of the country's
\nbanking system, which cost the economy thousands of trillions of
\nrupiahs until 2020, was among others caused by the reckless
\nattitude of bank managers.<\/p>\n
Bank owners raised public funds and channeled them to their
\nrespective business groups without adequate collaterals. Bank
\nmanagers, directors and commissioners alike are an integral part
\nof this practice. Even managers of state banks frequently come
\nunder political pressure from all sides to channel credit to
\ncertain interest groups.<\/p>\n
On top of that, the weak process of selecting bank managers
\nand lenient sanctions against violators of bank management
\nprinciples have made banks a target of fraud, ruining public
\nconfidence in banks.<\/p>\n
After five years of banking crisis, bankers, particularly
\nprivate ones, saw a shift in majority shareholders. Large banks
\nsuch as BCA, Danamon, Niaga and BII are now owned by new
\ninvestors. Most managers of these banks have been replaced. Yet,
\nreckless bank management practices show no sign of abating.<\/p>\n
BNI must set aside Rp 960 billion to cover losses resulting
\nfrom the questionable issuance of L\/Cs worth Rp 1.7 trillion.
\nLikewise, BRI has to put aside Rp 300 billion to offset losses
\ndue to fake deposits. Meanwhile, Mandiri must set aside Rp 1.7
\ntrillion due to a halt in the restructuring of PT Kiani Kertas.<\/p>\n
In general, Bank Indonesia Regulation No 5\/25\/PBI\/2003 is a
\nforward step by the central bank to improve the quality of bank
\nowners and managers, provided it is firmly implemented.<\/p>\n
For instance, when it comes to owners, Bank Indonesia requires
\ntheir banks to disclose the structure of their ownership.<\/p>\n
As such, the public would have an adequate knowledge of the
\nquality of bank owners and managers, something that is badly
\nneeded to improve public confidence in the banking system.<\/p>\n
-- Bisnis Indonesia, Jakarta<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/selecting-bank-managers-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }