Bank DKI to pursue Rp 340b bad debts

JAKARTA (JP): City-owned Bank DKI will set up a team to collect bad debts amounting to Rp 345 billion (US$49 million) following the failure of the Indonesian Banking Restructuring Agency (IBRA) to handle the non-performing debts, the bank's executive said on Thursday.

"The bad debts were earlier handed over to IBRA as part of the bank recapitalization program. But only 2 percent of the debts have been collected," the bank's president Maman Sulasman said after meeting with deputy governor for financial affairs Fauzi Alvi Yasin at City Hall.

In addition to the Rp 345 billion non-performing debts, Maman said the bank also had overdue debts amounting to Rp 329 billion.

He said the bank allocated Rp 107 billion and Rp 99 billion as reserve losses in September and October respectively, but acknowledged that the bank had recorded a profit.

He declined to reveal the figure, but said the profit was secured from city funds deposited in the bank with an annual interest of 0.8 percent.

A city councilor earlier criticized the bank's management for taking advantage of the city's surplus fund, which amounted to Rp 800 billion.

Head of the council's Commission C for financial affairs Amarullah Asbah questioned the bank's decision to deposit the fund to other banks with a market interest of 15 percent, saying that Bank DKI only paid interest of 0.8 percent to the city administration. (jun)