Bank PDFCI to become export funding agency

Bank PDFCI to become export funding agency

JAKARTA (JP): Minister of Trade and Industry Rahardi Ramelan
has confirmed that Bank PDFCI, one of the private banks
nationalized last year, will be transformed into a government-
sponsored export financing agency.

Rahardi told reporters on Monday that publicly listed PDFCI
would start operation in March to overhaul problems in the
country's export-related activities.

"You all already know which of the four banks taken over is
going to be changed into the agency, it doesn't have to come from
my mouth," he said, responding to reporters' queries on whether
the choice was PDFCI.

PDFCI, along with Bank Central Asia, Bank Danamon and Bank
Tiara Asia, was taken over by the government last August at the
height of a banking frenzy in the country.

Rahardi said the government was conducting a major overhaul of
PDFCI by disposing of its troubled assets and liabilities as well
as injecting fresh capital.

He said the export financing agency, designed to boost
declining exports, would not be able to draw public funds, with
its finance activities exclusively on export and import-oriented
activities.

The agency will receive funding from the government, which
will hold the majority stake, and from minority private
stockholders.

It will also receive financing from bilateral and multilateral
foreign aid channeled through the government and issue commercial
papers, he said.

Initially, the financing agency will provide subsidized,
preshipment working capital and export credit for exporters in
financial hardship to maintain their production.

It will dispense guaranteed short-term export financing and
export insurance, as well as operating as an export information
and data center.

The agency will later expand operations by providing exports
credit facilities, mainly for mid and long-term postshipment
financing.

The government has been in a dither for more than a year of
the economic crisis as it worked to solve financing problems
burdening local exporters with heavy reliance on imports.

The turmoil has eroded international trust in Indonesia's
banks and made it almost impossible for exporters to obtain
letters of credits from local banks to import their materials.
(das)