Chase will accept Indonesian L/Cs

JAKARTA (JP): The Indonesian Exporters Association (GPEI) said Thursday it had received firm commitment from the New York-based Chase Manhattan Bank to facilitate overseas transactions.

GPEI secretary-general Johannes L. Sitanggang said the assistance would include the bank's acceptance of letters of credit from Indonesian banks to settle payments for imported raw materials.

He said, however, that Chase Manhattan for the time being would only confirm L/Cs issued by state banks Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI), Bank Dagang Negara (BDN), Bank Bumi Daya (BBD) and Bank Pembangunan Indonesia (Bapindo), and private Bank Duta and Bank Lippo.

Under the agreement, he said, Chase Manhattan would accept 90- day usance L/Cs at present, and would consider accepting 180-day and 360-day usance L/Cs in the future.

The agreement was reached during a meeting between GPEI executive's and Astar Sale, Chase Manhattan's vice president for trade finance, and Anup Kuruvila, vice president of Asia trade finance in the bank's headquarters in New York early this month, he said.

Plunging confidence in the country's troubled banking sector has prompted international banks to reject local L/Cs. This has prevented firms from getting components essential for products to be manufactured for export.

Many foreign banks also no longer accept usance L/Cs from Indonesian importers and only accept a sight L/Cs.

Before the crisis, Indonesian importers normally opened a usance LC, which did not require such a large amount of cash up front.

Sitanggang said exporters facing such barriers could contact the Chase Manhattan Bank in New York and its branch in Jakarta directly or through GPEI. (gis)