Bankers appoint team to cope with problem loans
Bankers appoint team to cope with problem loans
JAKARTA (JP): The Domestic Private Banks Association
(Perbanas) ended its two-day congress here last night with a
strong commitment to helping its members cope with non-performing
loans through its newly established consultative team.
"All members unanimously greeted the establishment of the new
team, which is designed to provide consultative services on
problem loans for its members," the association's chairman,
Trenggono Purwosuprodjo, told reporters after the closing
ceremony of the congress.
He said the team will cooperate with all related government
agencies, including the Ministry of Justice, the Office of the
Attorney General, the State Receivership Agency, the National
Land Agency and Bank Indonesia, the central bank, to help settle
problem loans faced by private commercial banks, he said.
"We recommended that the team have lawyers and other experts
in banking and economics," he said.
Last night's congress reappointed Trenggono and I Nyoman Moena
as Perbanas' chairman and head of supervisory council,
respectively. It appointed the former secretary general Thomas
Suyatno as new vice chairman and Muchtar Mandala, a former
president of Bank Bukopin, as secretary general. The 12th
assembly, which was opened by President Soeharto on Thursday and
closed by a central bank director, Hendrobudiyanto, also
established a new committee for studies and development, which
will support the team in dealing with problem loans.
"Our decision on the establishment of the team reflects our
commitment to improve the banking industry in the country, which
has been rocked by uncertainties recently," Trenggono said.
The Indonesian banking industry was recently sparked by a
number of non-performing loans.
Cases
Thomas told The Jakarta Post there are at least 300 cases of
bad loans, 225 of which will be executed soon.
He noted that by the end 1993, bad loans of 156 private banks
were estimated to reach Rp 1.5 trillion (US$697.02 million) or
2.7 percent of the total loans provided by the banks.
Minister of Finance Mar'ie Muhammad recently reported that the
bad loans at the seven state banks jumped by 360 percent within
the past three years to over Rp 14.97 trillion, reflecting 21
percent of their outstanding loans as of last October.
Most of participants saw that non-performing loans at private
banks to have been caused primarily by mismanagement, including
the ignorance of prudential principles of banking operation.
Timoty E. Marnandus, the new secretary of Perbanas's
supervisory council, told the Post that ignorance of business
ethics was partly to blame for the banking tragedy.
At the opening of the congress, President Soeharto urged
bankers, whose industry has been rocked by a multi-million dollar
credit scam, to make a concerted effort to improve internal
supervision and management to prevent making bad loans.
Soeharto said that officials from the Ministry of Justice, the
Office of the Attorney General, the National Land Agency, the
State Receivership Agency and monetary authorities should also
cooperate to seek fair and swift ways to legally settle non-
performing loan cases faced by the banking industry.
Thomas said that the congress, considering the President's
instructions to improve the banking industry, also decided to put
a high priority to promote credit expansion.
Perbanas is optimistic to reach this year's national target of
an 18 percent increase in credit expansion for businesses. Twenty
percent of the credit expansion will be allocated for small-scale
businesses.
The association will cooperate with secondary banks and
various financial institutions throughout the country to promote
the expansion of credits for small entrepreneurs.(fhp/icn)