BI to fine banks that refuse risk management plan
BI to fine banks that refuse risk management plan
Urip Hudiono, The Jakarta Post, Jakarta
Bank Indonesia (BI) will impose a fine of Rp 1 million (US$117)
per day on any bank that has not submitted their risk management
action plan to the central bank yet, a BI official said.
"BI will also hold the banks' board of directors responsible
if the banks then get into financial trouble due to the lack of a
risk management policy," BI second deputy director for bank
supervision Aris Anwari said on Wednesday, at the sidelines of a
seminar on the prevention of banking fraud.
Asri explained that the central bank had issued a regulation
last year requiring all banks in the country to implement a risk
management policy, in order to prevent banking scams.
"BI issued the regulation in May last year, and has been
calling on all banks to comply ever since," he said.
Following the recent lending scandals befalling Bank Negara
Indonesia (BNI), and Bank Rakyat Indonesia (BRI), BI has stepped
up compliance of the regulation by requesting all banks to submit
their risk management action plans by March.
"Of the 28 banks under my supervision, all of them have
complied with the deadline, including major banks, Bank Danamon
and Bank Central Asia (BCA)," Asri said.
Asri, however, did not explain the status of other banks not
under his supervision. There are about 130 banks in the country
at present.
Asri further explained that according to the regulation, BI
had also set a target for all banks in the country to have
implemented a risk management policy by December this year.
"All banks should therefore start implementing a risk
management policy accordingly for their assets and operations to
meet the target," Asri said.
"Small banks, with assets up to Rp 100 billion, should at
least implement risk management for their lending procedures,
market, liquidity and operations," he continued.
As for banks with larger assets, Asri suggested that they also
implement additional risk management policies, factoring in all
laws and regulations, as well as a company strategy and
reputation.
"Risks towards company reputation include customer complaints
of the bank's service," he said.
Last October, state-owned BNI was hit by a letter-of-credit
scandal, resulting in a potential losses of Rp 1.2 trillion for
the bank.
State-owned BRI was then struck by a similar scandal. BRI was
hit by a loan scam resulting in potential losses of Rp 297
billion.