Mon, 23 Oct 2000

BII housing loan

This is an open letter to the board of directors of Bank International Indonesia. I am the owner of a house at Taman Sentosa Compound Block A3 No. 9, Bekasi-17550, bought under the name of Aryani Suhartono, using the house-ownership loan scheme from BII.

The interest rate is very flexible but non-negotiable in the sense that if the interest rate of BI rises, this BII house- ownership loan interest will also rise and we have no right to ask for a lower interest rate (something like this occurred in 1999 and the customers went to BII in protest).

A house-ownership loan agreement is made before a notary on a take-it-or-leave-it basis, meaning that the customer has no right to make any corrections to it, putting therefore the customer in a weak position.

As an employee with a modest income, I intended to pay off the debt, not much in amount, using my savings and some financial help from my office.

So on Oct. 19 my husband, a reporter, went to the BII branch on Jl. Juanda and met Mr Yudhi of the marketing department and told him why we intended to pay off the debt. My husband told him that considering he is a reporter and I am an employee of a private company (now waiting for the birth of our baby), we were afraid the cost of living would increase as the rate of interest shot up. Therefore, my husband said, we would like to make use of an interest-free loan from the office.

Unfortunately, it seems that BII still wants to get more of our money because Mr Yudhi suggested that we postpone the settlement of our debt and pay an interest rate of 17 percent and that our money should be deposited at an interest rate of 8 percent to 9 percent.

After my husband tried many times to explain our situation, Mr Yudhi had no choice but to try and understand it. Then he told us that our outstanding debt was made up of the remaining principal, the amount of current interest, an administration charge and a settlement charge of 2 percent of the remaining principal. The 2 percent settlement charge is equal to over Rp 1 million, an amount quite big for us. Therefore, we asked that this settlement fee be written off and Mr Yudhi promised to help.

On Oct. 20, the bank contacted my husband, saying that they could agree to forgive only 50 percent of the settlement fee. They said it was their final decision that the fee imposed is 1 percent.

It was added that the stipulation was contained in the agreement, which to us, a small-scale customer, sounds strange. In fact, this amount of 1 percent of the principal would not cause BII to go bankrupt if, for example, it was given to us. On the other hand, if it is imposed on us, it will not mean much to BII. Although the amount is only some Rp 600,000 (to quote what Mr Yudhi told us) it will be burdensome for us.

We, the common people, can only ask BII whether they have acted fairly and defended us? In other banks, a settlement of an outstanding debt in the context of a house-ownership loan scheme will entitle the customer to a discount. Debts arising from a house-ownership loan scheme in banks whose operations are suspended and which are now handled by the Indonesian Bank Restructuring Agency (IBRA), despite having been in arrears for many years, will have their interest written off. In some cases, the customers will even get a discount on the principal.

Therefore, must the common people, who can only manage to keep body and soul together, continue to subsidize BII, which has now come up with its cyber-banking product? Is it really the intention of BII to make us too poor to pay our loan installments so that it can finally confiscate our house? Or, perhaps, we must keep praying that BII will some day be liquidated, a situation enabling us to hope for a generous act from the government/IBRA?

Can't we have an opportunity to enjoy a benefit from BII although we have been good house-ownership loan customers for over four years?

On this occasion, allow me to propose to BI officials, the National Banks Association (Perbanas), the Indonesian Consumers' Institute Foundation (YLKI) and all authorized parties to review the procedure set for obtaining a house-ownership loan from banks and the agreements pertaining to this scheme in Indonesia. The conditions set in the agreement must be transparently explained, as must the rights and obligations of a customer. As things stand now, the agreement is heavily tipped in favor of the bank and it is often the case that a customer, who is but one of the commoners, has his rights slighted and ignored simply because of his ignorance.


Customer of BII housing loan