Bank Indonesia declares its readiness for millennium bug
JAKARTA (JP): Bank Indonesia (BI) assured on Tuesday there would be no glitches in domestic banking transactions in entering the new millennium, but added it was armed with a contingency plan just in case.
The central bank's deputy director of information technology, Mulyana Sukarni, said the entire transaction system, including on-line activities, was ready for the Year 2000 (Y2K) bug.
"We are sure that there will be no disruptions in clearing activities when we enter the new year as all the existing transaction systems are already 100 percent Y2K compliant," he told a media briefing.
Mulyana said the central bank devised a contingency plan to ensure that clearing activities would not be disrupted if the existing system failed at the turn of the year.
He said the central bank would use the semiautomatic off-line system, known as the "local" clearing system, in the event of a system failure.
"The worst-case scenario would if the local system also could not work. In that case, we would go back to manual procedures, but we hope this would not happen," he said adding that the manual system was not at all affected by the Y2K bug.
The Y2K bug refers to a theory based on older computer systems recording dates using only the last two digits of the year. If not corrected, such systems could treat "2000" as "1900", generating errors or system crashes when the date rolls over to Jan. 1, 2000.
Mulyana said that the success of the central bank -- as the clearing agency for all banking transactions in the country -- in beating the millennium bug would depend heavily on the preparedness of the commercial banks.
He said that of the 167 banks in the country, 162 were 100 percent Y2K compliant.
"Five small banks are still working on their Y2K preparedness and expected to be fully ready on Dec. 20," he said.
Mulyana said BI advised all banks to report to the central bank prior to the end of the year on the status of their Y2K pre- event management.
"They are advised to give reports on Dec. 14, Dec. 24, Dec. 27 and Dec. 31," he said.
In the report, each bank should describe the transactions of its customers, as well as its counterparty banks and the bank's liquidity position.
No holidays
The head of BI's Y2K Committee for Private Banks, Andreas E. Susetyo, said there would be no extra holidays designated during the Y2K transition period.
He said that clearing activities, as in the past, would be closed on Dec. 31 in conjunction with the year-end book closing.
"Like in previous years, it will be a working day on Dec. 31 but there will be no clearing activities."
He said the central bank's employees in the information technology department would continue to work on Jan. 1 and Jan. 2.
"These people will continuously monitor the system as the Y2K transition period passes," he said.
Bank Indonesia will only settle interbank clearing for sums of Rp 100 million and above on Dec. 30. Lower amounts would be completed on the first working day of the new year, he added.
He said people could still withdraw cash from ATMs throughout the Y2K transition period.
The country's capital market and its supporting institutions previously also declared their preparedness for the millennium bug.
Committee chairman Surdiyanto Suryodarmodjo said investors did not have to worry about possible disruptions in stock trading activities in the new year as trading systems at both the Jakarta and Surabaya stock exchanges were 100 percent Y2K compliant.
The Indonesian Clearing and Settlement Agency (KPEI) also achieved 100 percent Y2K compliance in its computerized clearing system, he said.
Surdiyanto acknowledged that the Indonesian Central Securities depository (KSEI) was not yet compliant, but he said that it would not affect overall transactions because the institution still used manual systems in daily operations.
He said two-thirds of the 186 securities companies completed and passed a process of final testing for Y2K compliance. The remaining one-third were declared free from possible Y2K effects because they used manual and semimanual operating systems. (udi)