Closed banks told to form liquidation teams soon

Closed banks told to form liquidation teams soon

JAKARTA (JP): The balance remaining after refunding up to Rp
20 million (US$5,900) per account at the 16 closed banks will be
paid by liquidation teams, not by the paying banks, a Bank
Indonesia official said yesterday.

The head of the banking supervision department at the central
bank, Budi Rochadi, said shareholders of the closed banks should
quickly hold extraordinary meetings to set up liquidation teams
to take care of customers with accounts of more than Rp 20
million.

"Although they have two months since the closure of their
banks to form liquidations teams, it would be better if the teams
were set up as early as possible," Budi said.

The government closed the 16 ailing banks on Nov. 1 in an
effort to improve the financial sector.

Budi said the caretakers of the closed banks, appointed by the
central bank, would arrange the extraordinary shareholders
meetings to form the liquidation teams.

If the liquidation teams could not be formed within the two-
month period, the teams would be formed through district courts,
he said.

Budi said there were 660,000 accounts at the 16 closed banks,
of which 623,000 had savings of Rp 20 million or less and 37,000
accounts having more than Rp 20 million.

The 37,000 accounts represented about 85 percent of total
funds at the 16 closed banks which, according to an estimate,
stood at about Rp 7.3 trillion.

Yesterday was the first day scheduled for the refunding of
depositors of up to Rp 20 million per account.

Small depositors began to line up early in the morning at the
closed banks' branches to obtain checks that can be cashed at the
three designated paying state banks: Bank Dagang Negara (BDN),
Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI).

The central bank said in a statement on its website that there
was no set deadline for the refunds, so small depositors could
get their savings through the paying banks anytime.

All banks would even stay open Sundays to expedite the refund
process and, if necessary, would stay open after Nov. 30.

Budi said the government had disbursed Rp 1.7 trillion, lower
than the previous allocation of Rp 2.3 trillion, in bridging
finance to the three paying banks to refund small depositors.

"I haven't got any report on the disbursement of the funds by
the paying banks," he said after accompanying members of the
House of Representatives Commission VIII for finance, who were
inspecting the reimbursement process.

BRI president Djokosantoso Moeljono said his bank would pay
out some Rp 1.1 trillion, smaller than previous estimate of Rp
1.4 trillion, to small depositors of the closed banks.

He acknowledged that many of the refunded depositors opened
new accounts at BRI.

Legislator Indra Bambang Utoyo said the fact that depositors
of the closed banks placed their funds in the paying state banks
was evidence that the people still "trust the country's banking
industry". (rid)