Bank Putera needs Rp 200b to restart clearing

Bank Putera needs Rp 200b to restart clearing

JAKARTA (JP): Bank Putera Multikarsa, hit by a massive run in
recent days, needs at least Rp 200 billion (about US$28.5
million) to enable it to resume its clearing activities, a
reliable source said on Wednesday.

The source said Bank Putera incurred a negative balance of
around Rp 200 billion with Bank Indonesia, and that it needed to
inject the same amount of funds if it wanted to resume its
clearing activities.

Bank Indonesia temporarily suspended the clearing activities
of the bank on Tuesday after it suffered heavy losses in its
interbank clearing activities.

Bank Putera, the financial arm of the well diversified Texmaco
Group, faced financial difficulty after a run on Monday by its
depositors following a weekend Internet media report that
supervision of Bank Putera was transferred to the Indonesian Bank
Restructuring Agency (IBRA). The report was denied by the bank's
president Masyhud Ali.

The run dried up the bank's reserves and put its account in
the central bank in the negative position.

The source said Bank Putera was trying to recover loans owed
by other banks, including those under the control of the
Indonesian Bank Restructuring Agency (IBRA), to cover the
negative position of its account in the central bank.

Under the government blanket guarantee program, all
obligations of closed banks, including interbank claims, are
guaranteed by IBRA.

But the agency suspended the payment of interbank claims owed
by closed banks after the high-profile Bank Bali scandal.

IBRA is auditing the remaining unpaid interbank claims to
prove that they are eligible to be included in the guarantee
scheme.

The source said Bank Putera could also ask for a maximum 90-
day credit from Bank Indonesia if it had liquid collateral,
particularly the central bank's promissory notes.

But the source said the new law on the central bank, which was
introduced early this year, no longer allowed the central bank to
provide such liquidity support.

"Bank Putera is actually a solvent bank, but it was illiquid,"
the source said.

Bank Putera's total assets as of November 1999 stood at Rp 2.9
trillion with a net equity of Rp 440 billion.

Bank Putera is a medium-size bank which had been relatively
unscuttled by the country's worst banking crisis. The bank has a
capital adequacy ratio of more than 4 percent, which frees it
from the government-sponsored bank recapitalization program.

The government has so far closed 66 banks, nationalized 11
banks and recapitalized eight banks.

Many banks were recapitalized because their CAR level dropped
into negative territory due to the financial crisis. (rei)