Bank Global repayments to start next month

Bank Global repayments to start next month

The Jakarta Post, Jakarta

The government will start repaying depositors of the recently
closed Bank Global in the first week of February in accordance
with its blanket guarantee program.

In a public announcement, the Ministry of Finance's bank
guarantee implementation unit (UP3) head Isa Rahmatawarta vowed
that all depositors would be honored under the guarantee program
covering Bank Global.

Under the blanket guarantee program, depositors can claim
their repayment at the branches of designated banks by filling
out an application form accompanied by bank books and other
official documents from the closed bank.

The UP3 will then verify all documentation before releasing
repayment.

Bank Indonesia (BI) suspended Bank Global for a month on Dec.
13 because of its severely weakened financial condition from
fictitious lending, subordinate bonds and other alleged banking
fraud.

At the time of suspension, Bank Global's capital adequacy
ratio (CAR) stood at minus 39 percent against the minimum CAR
requirement of 8 percent as set by BI.

The central bank closed Global on Thursday, Jan. 13, after its
management failed to improve the bank's financial condition.

BI said Bank Global's third-party liabilities amounted to Rp
759 billion (US$84.3 million), of which Rp 723 billion was in
time deposits and Rp 36 billion in savings accounts.

Dozens of depositors, however, have questioned BI's assessment
of Bank Global's liabilities. Some 50 depositors went to the Bank
Global central branch on Friday, claiming that their savings at
the bank reached some Rp 200 billion alone.

The government is likely to cover losses of up to Rp 300
billion, as Bank Global has Rp 400 billion in assets and only Rp
30 billion in cash reserves.

The Jakarta Stock Exchange (JSX) is to delist Bank Global
shares from the bourse immediately following its closure by the
central bank.

JSX listing manager Wan Wei Yiong said the measure would be
taken as soon as it was approved on Monday by the JSX listing
committee.