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)