Bank Indonesia aims to improve skills of banks' staffs

The Jakarat Post, Jakarta

Bank Indonesia will require staff members at the country's banks to receive competence certification in their respective fields as part of the effort to improve the banking industry.

The head of the financial system stability division at the central bank, Mulyaman Hadad, was quoted by Antara as saying on Saturday the certification requirement would also help push banks' staffs to continue to improve their expertise.

As an example, he said a credit analyst would be required to have competence in the area of risk analysis in a number of economic sectors such as agriculture, information technology, etc.

Mulyaman said the banking sector was weak in credit risk management partly because most bank employees were only able to analyze credit risk in the consumer sector.

This is seen as a contributing factor to the rejection of many of the credit proposals from the corporate sector.

It is still not clear, however, when the new certification requirement would be implemented.

The central bank has been aggressive in cutting its benchmark interest rate in the hope that lending rates will also drop, thereby boosting new loans to the corporate sector to help accelerate economic growth.

But loans to the corporate sector have remained low as most banks, just recovering from the late 1990s financial crisis, still consider it risky investing in local companies given the slow progress in restructuring corporate debt.

Analysts have also said that the costly banking crisis was partly the result of the past weak risk management of banks in lending money to corporations.

Mulyaman said the central bank would cooperate with the Association of National Private Banks and the Association of State Banks in issuing competence certifications and designing a curriculum for banking courses.

He said that eventually the certificates would be issued by a special institution.

"There will be a new institution assigned to issue the certificates, but this must be approved by all the banks so that there will be confidence in the program," he said.

Supervisory staff at Bank Indonesia will also be required to receive competence certification.

"The certification will be issued by an institution outside Bank Indonesia," he said.

Bank Indonesia's banking supervisory role has been criticized following the recent emergence of lending scams at Bank BNI and Bank BRI.