BI closes down Bank Putera

BI closes down Bank Putera

JAKARTA (JP): Bank Indonesia (BI) announced on Friday night
that it had closed ailing Bank Putera Multikarsa after its owner
could not come up with fresh funds to recapitalize the bank.

Bank Indonesia deputy governor Subarjo Djojosumarto said in a
media conference that Bank Putera had a capital adequacy ratio
(CAR) of minus 48.15 percent -- far below the minimum 4 percent
requirement.

"Based on the result of an independent audit, the bank has a
negative CAR of minus 48.15 percent and nonperforming loans of
more than 80 percent," Subarjo said.

He also said all obligations of the bank would be guaranteed
by the government.

He said the depositors' money would be paid via Bank Central
Asia (BCA).

The central bank put Bank Putera under the supervision of the
Indonesian Bank Restructuring Agency (IBRA) on Dec. 10 after the
bank's owner failed to raise funds to settle the bank's negative
account at Bank Indonesia.

Bank Putera's clearing activities were suspended by the
central bank on Dec. 7 after it suffered a negative balance with
Bank Indonesia amounting to Rp 278.5 billion (US$38 million)
following a run on the bank.

The run amounted to Rp 592.3 billion, which dried up its
reserves at the central bank and put its account at Bank
Indonesia in negative territory.

The run on the bank was prompted by reports that it would be
taken over by IBRA in the wake of the revelation of a
multimillion dollar loan scandal involving the bank's owner,
Texmaco Group.

But the central bank allowed the bank to resume clearing
activities last week, after IBRA provided a temporary loan to
settle its negative account at Bank Indonesia.

Bank Putera has total assets of Rp 3 trillion. Its third party
funds amounted to Rp 413 billion, while credit to its affiliated
group reached 69.33 percent of its total lending of Rp 1.3
trillion.

Subarjo said that the central bank was still checking on three
other banks which had just recently injected funds to improve
their capital level.

He said that the central bank was making sure that the money
did not come from loans or "money laundering".

Under the agreement with the International Monetary Fund, Bank
Indonesia asked owners of banks whose CAR falls below 4 percent
to raise the capital to that level by Jan. 20, otherwise
corrective actions would be taken against those failing to comply
with the requirement. (rei)