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)