BI to reveal names of problem banks

BI to reveal names of problem banks

JAKARTA (JP): Bank Indonesia, the central bank, will announce
the names of troubled banks.

But Bank Indonesia's governor, Soedradjad Djiwandono, refused
to say when he would announce the names.

Soedradjad was speaking after meeting President Soeharto.

He said Monday night that Bank Indonesia was helping problem
banks to consolidate and get into stronger financial positions.

Bank Indonesia has stakes in several troubled banks like Bank
Pacific and Bank Uppindo.

Soedrajad said Bank Indonesia would gradually divest from
troubled banks once they were back on track.

"Bank Indonesia's entry into several banks as a shareholder
was only temporary and designed to help salvage those banks,"
Soedradjad said.

Bank Indonesia owns 51 percent of the ailing Bank Pacific.
Former state oil company Pertamina president, Ibnu Sutowo, and
his family, own the rest.

The central bank also owns 23.3 percent of Bank Uppindo. The
other owners include Bank Asia Pacific (65 percent), Nederlandse
Financierings Maatschappij Voor Ontwikkelingslanden (7.9 percent)
and the Asian Development Bank (3.8 percent).

On Monday night Soedradjad said the central bank would
continue to take a case-by-case approach to helping troubled
banks.

"We believe each of the problem banks have special
characteristics of their own and face specific problems. Thus, we
have to take a case-by-case approach even though analysts may see
this as discriminatory," he said.

Several analysts have accused the central bank of being
inconsistent with regard to its efforts to cope with some problem
banks which are owned by politically well-connected shareholders.

Collusion

Meanwhile, sources said several Bank Indonesia supervisors
have been suspended because of their alleged involvement in
covering up problems at troubled banks.

The sources said three supervisors, who are still being
investigated, were suspected of colluding with the executives of
the troubled banks they were helping.

The collusion is said to involve bribes of up to Rp 60 billion
(US$24.8 million).

But Soedradjad refused to answer questions about the suspended
bank examiners.

"They still work at Bank Indonesia. You don't know how the
process has been evolving from the beginning," he said.

He denied the three examiners had been sacked but confirmed
staff changes.

Last year, Bank Indonesia's treasury chief was accused of
defrauding the bank of Rp 7 billion. The case is being tried at a
Jakarta district court. (rid)