BI and supervisory function

In response to a statement from the head of Bank Indonesia (BI)'s communications bureau, A. Djaafara, and the director of BI's Bank Supervision Directorate, Sabar Anton Tarihoran (Suara Pembaruan, Jan. 27) regarding Bank Global to the effect that: 1. The proceeds from the disbursement of mutual funds must be collected as cash. 2. The procedure does not conform to usual transactions regarding charging on the bank's liability side without any entry of cash funds in the asset side. 3. The BI supervision team was limited in its movement in Bank Global so that BI found it difficult to conduct tight supervision. 4. Sabar Anton Tarihoran will explain this matter directly to the customers.

As Bank Global customers, we would like to express the following: 1. Which regulation can explain that the proceeds from the disbursement of mutual funds must be collected as cash? Just imagine that the mutual funds disbursed are in the amount of billions of rupiah and you have to collect the money in cash.

This is in conflict with the payment system in Indonesia because, aside from cash payment, it is also valid and authentic to have payment through book transfer, through giro accounts and saving accounts plus LLG and RTGS. BI has itself recommended that transactions in huge amounts should not be carried out in cash to prevent money laundering. So, the statement of BI, as the central bank, contradicts the regulations that BI has issued itself. 2. A procedure that does not conform to usual transactions on the charging of the bank's liability side without any cash funds entering the asset side.

This is weird and ironical that the full tasks and responsibility have been absolutely shouldered by BI, especially these transactions occurred during the period of BI's special supervision over Bank Global, from Oct. 27, 2004 up to Dec. 13, 2004. Why didn't BI prevent these transactions and why did it allow them to happen, instead?

Must, for each transaction, a customer personally go into Bank Global to supervise the records and book-keeping of the bank's transactions? If so, what is the purpose of BI's supervision?

It is really shameful that BI, as the central bank and the only authority to carry out supervision over the activities of all banks in Indonesia, was powerless in dealing with banks that should be under its own supervision.

How can the public trust some 140 banks in Indonesia? 3. We agree that Sabar Anton Tarihoran will give a direct explanation to the customers.

JOHARI et al Bank Global customers