Bank Indonesia to take errant bankers to court

Bank Indonesia to take errant bankers to court

JAKARTA (JP): Bank Indonesia (BI) Governor Sjahril Sabirin
pledged on Tuesday to take to court the management and owners of
the 38 banks closed down last week who were suspected of
violating banking rules.

He said the banking authority was also drawing up a list of
bankers who would have to be barred from traveling outside the
country.

"Those suspected of violating banking rules will be legally
processed," Sjahril told reporters on the sidelines of a debate
session on the new central bank bill with the House of
Representatives' Commission VIII on finance and the state budget.

He added, however, that the central bank would not announce
the list of errant bankers because their names would anyway be
made known to the general public when they were taken to court.

The finance minister told the House early this month that the
government would announce the list of these miscreant bankers
together with the launching of the major bank restructuring
program.

The government closed down 38 insolvent banks, took over seven
other bankrupt banks and bailed out nine major insolvent banks
late last week in a massive restructuring of the crippled banking
industry.

Minister of Justice Muladi warned on Monday that some 700
bankers of the liquidated institutions could be barred from
traveling out of the country.

"If we wanted to slap a travel ban on all of them, there would
be about 700 bankers," he said.

He, however, said that only errant bankers suspected of
intending to flee the country would be banned from traveling.

He said that his office was still waiting for the list of
these bankers from the banking authority.

"We will immediately complete the list," Sjahril said.

He, however, stressed that bankers barred from traveling
overseas would not necessarily be errant bankers.

"They may be banned from traveling simply because they're
needed for the investigation process," he said.

He added though that the number of bankers to be put under the
travel ban would very likely be less than 700.

"We don't have to slap the travel ban on those not intending
to flee the country," he said.

Separately, the Indonesian Bank Restructuring Agency (IBRA)
said on Tuesday that it would summon the owners of five closed
banks who had indirectly created difficulties for their customers
in withdrawing deposits under the government guarantee scheme.

IBRA vice chairman Eko Santoso Budianto said that the owners
had not been helpful by declining to negotiate with their former
employees on a fair compensation package.

"We will call the bank owners. We demand their full
cooperation," he told reporters at a press conference.

He said that employees of the five closed banks had declined
to verify customers' accounts, creating difficulties for the
depositors in withdrawing their money at the government-appointed
paying banks.

Employees at several shut-down banks continued to stage
peaceful sit-in demonstrations at their banks on Tuesday to
demand their employers provide adequate compensation in addition
to the government's standard severance allowances.

The rallies have made it impossible for depositors of the
banks to get verification of their accounts.

"They're still employees of the banks and are still being
paid. They have their rights but also have obligations. So we
have urged them to be cooperative," Eko said.

More than 17,000 employees of the 38 closed banks are facing
redundancy.

But Eko said that around 10,000 of the total would still be
hired by his agency for two months to help the process of
transferring the banks' assets into the agency's asset management
unit.

IBRA's corporate secretary Christovita Wiloto said that
several sound banks which had shown a strong interest in
purchasing the branches of the liquidated banks would also need
additional employees.

"Certainly, this process takes time," he added.

He, however, failed to explain how the remaining banks could
realize their expansion plans when the banking industry is
predicted to remain in the doldrums over the next one or two
years. (rei)