Bankers, bad loans scrutinized
Bankers, bad loans scrutinized
JAKARTA (JP): Minister of Finance Mar'ie Muhammad vowed
yesterday to bring directors and staff of state banks to court if
there is any indication that they colluded with businesspeople to
extend credit which latter soured.
"If the new bad loans resulted from collusions between bank
directors or staff and businessmen, we will resolve it according
to the law like we did with Eddy Tansil," Mar'ie told journalists
after attending a deliberation over the capital market bill at
the House of Representatives.
Eddy Tansil, the boss of the Golden Key Group, and a number of
executives at the state-owned Bank Pembangunan Indonesia
(Bapindo) were imprisoned after being convicted of corruption
involving more than US$430 million in unpaid debts to the state
bank.
Mar'ie's statement was made in relation to the sudden increase
in bad loans at seven state banks during the April to June
period. Bad loans totaled Rp 7.31 trillion (US$3.1 billion) last
June, up from Rp 7 trillion in April.
The seven state banks are Bank Bumi Daya, Bank Dagang Negara,
Bank Ekspor Impor Indonesia, Bank Negara Indonesia, Bapindo, Bank
Rakyat Indonesia and Bank Tabungan Negara.
"However, we should not be trapped by the past. While we move
toward the future, we can deal with the problems (of bad loans).
At least the condition should not worsen," Mar'ie said.
Hard work
The minister assured that the Ministry of Finance and Bank
Indonesia, the central bank, are working together to solve the
bad loan problem. He said it was very hard work.
He noted that problem loans occur not only in developing
countries like Indonesia, but also in developed countries like
Japan. "It's not an apology if I said that Japan is facing
similar problems, which are not lighter than what Indonesia is
facing right now."
At a hearing with the House of Representatives' Budgetary
Commission on Thursday, Bank Indonesia Governor J. Soedradjad
Djiwandono disclosed that bad loans totaling Rp 7.31 trillion at
the seven state banks accounted for 73 percent of the total bad
loans of Rp 9.97 trillion at all of the country's commercial
banks, or 4.16 percent of the outstanding credit as of June.
Soedradjad said that despite the increase of state banks' bad
loans, domestic private commercial banks had reduced their
problem loan exposure to Rp 1.66 trillion as of June from Rp 1.79
trillion in April.
Soedradjad, however, didn't give a reason for the increase in
problem loans at state banks. He only said that the necessary
action had been taken by Bank Indonesia to solve the bad loans
and prevent future problem loans.
Bank Negara Indonesia President Winarto Soemarto was quoted by
Antara as saying the increase in bad loans at state banks may
have been caused by unpaid interest loans. They are automatically
included as bad loans after being in arrears for three months.
Winarto said there is a very small possibility of new bad
loans emerging at state banks because they are now equipped with
"action plans" from their lender, the World Bank.
"The amount and percentage of bad loans at state banks should
decrease if they execute the World Bank's action plans according
to schedule," Winarto said. (rid)
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