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)