Bank solvency

Bank solvency

From Neraca

With regard to the closure of Unibank, I am increasingly in doubt about saving my money in a national bank. Moreover, rumors abound that two more banks will also be closed.

Will our deposits in national banks be safe? Certainly yes, as the government provides a blanket guarantee to all third parties' funds in national banks. This means that we can select any bank, regardless of its reputation or the quality of its management, and need not worry about our deposit.

The government, however, needs to review this blanket guarantee policy as the funds used to guarantee the deposits of bank customers come from the state budget. This means the public itself would have to shoulder the burden of this guarantee.

Also, it would be better if the government changed its policy on bank secrecy so that it could announce the ranking of all banks in terms of their solvency via either the finance ministry or Bank Indonesia. In this way customers would be able to select their own bank. Of course, a customer would take the risk if he saved his money in a bank with poor solvency.

The government's argument that disclosing this solvency ranking would put certain banks out of business does not hold water because even when this ranking has been kept secret, bank closures have still occurred. In the case of a bank closure, bank owners will have benefited by using their customers' money irresponsibly, while the government and the public at large will have had to bear the brunt.

WAZIR MUKTASIM

Jakarta