Stakes in banks 'should be limited' to 20 percent<\/p>\n
JAKARTA (JP): The Federation of Private Domestic Banks
\n(Perbanas) called on the government yesterday to limit bank
\nownership to no more than 20 percent.<\/p>\n
The head of the association's advisory board, Thomas Suyatno,
\ntold reporters the limitation would prevent banks from creating
\npolicies merely to cater to their majority shareholders.<\/p>\n
"Any bank shareholder must not have more than a 20 percent
\nshare so that there will be no more majority shareholders,"
\nThomas said after a hearing with the House of Representatives
\nCommission VIII for state budget and finance, research and
\ntechnology.<\/p>\n
The limit is seen as a means to eventually improve bank
\nmanagement.<\/p>\n
It would also prevent practices in which bank majority
\nshareholders pressured bank managements to adopt policies which
\ncould harm its public funds.<\/p>\n
Currently, most domestic banks are largely controlled by
\nbusiness groups or families.<\/p>\n
Thomas, who is also a member of the commission, said the same
\nrule must apply to state-run banks as well.<\/p>\n
The transition limiting bank ownerships must be conducted
\nwithin the next two years, before the country enters the
\nAssociation of Southeast Asian Nations Free Trade Area (AFTA) in
\n2003, he said.<\/p>\n
The central bank would have to monitor the transitions to
\ndetect any infractions by bank shareholders should the policy
\ncome into effect.<\/p>\n
Thomas said the phasing out of majority ownerships could be
\ndone through mergers, consolidations and acquisitions, as well as
\npublic share offerings.<\/p>\n
Separately, banking magazine Infobank announced yesterday its
\nratings of 215 commercial banks based on their 1997 financial
\nreports.<\/p>\n
The 215 banks surveyed by include foreign and joint-venture
\noperations.<\/p>\n
Best performers in 1997 include Hanil Tamara Bank, Bank Korea
\nCommercial Surya, Bank Harfa, Bank Global Internasional, Bank
\nIndex Selindo, Bank Panin, Tokai Lippo Bank, Liman International
\nBank, Bank Chinatrust Tamara and Bank Kesejahteraan.<\/p>\n
Infobank managing editor Eko Budi Supriyanto said yesterday
\nthe survey's only flaw was that it was based on the banks' 1997
\nfinancial reports.<\/p>\n
Economist Sri Mulyani said that the financial reports would
\nnot be enough to judge the banking industry, especially since
\nconfidence in the sector was plunging and because of high
\ninflation.<\/p>\n
"During times of high inflation, financial ratios do not mean
\nmuch," she said, adding that she was skeptical over the banks'
\nfinancial information because the sector had a poor disclosure
\nquality in the past.<\/p>\n
The magazine also named 32 banks as unhealthy.<\/p>\n
The magazine, however, said it may raise the number to 53
\nsince another 21 banks, which had failed to disclose their 1997
\nfinancial reports by the April deadline, were suspected to be
\nunhealthy as well.<\/p>\n
Those categorized as unhealthy include Bank Papan Sejahtera,
\nDeutsche Bank (Jakarta), Bank Rakyat Indonesia, Rabobank Duta
\nIndonesia, Bank Nusa International, Bank Central Dagang, Bank
\nTata, Bank Ficorinvest, Bank Dagang Negara, Bank Dagang dan
\nIndustri, Bank Bumi Daya and Bank Sewu.<\/p>\n
The banks which failed to disclose their 1997 financial
\nresults include Bank BNP Lippo Indonesia, Bank Credit Lyonnais
\nIndonesia, Indosuez Indonesia Bank and Bank Societe Generale
\nIndonesia. (das\/rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/stakes-in-banks-should-be-limited-to-20-percent-1447893297",
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