Danamon experience

Danamon experience

Some months ago you published several readers' complaints
about BCA and its dollar/rupiah exchange practices, to which we
were belatedly treated to a lecture on banking cartel agreements
by its PR staff. This was followed by small change in its policy.
Since then, BCA and/or its owners reportedly purchased a 19
percent share in Danamon.

But rarely have I seen such a "wet" response to a complaint as
that apparently written by Danamon (The Jakarta Post, March 14)
in an effort to pacify its customer and your reader Michael
Stewart Knight. Using the "current economic situation" is a
feeble excuse when the established spread between buying and
selling U.S. dollars is between 20 percent and 30 percent. A more
appropriate word would be "profiteering".

Six months ago, I placed a dollar deposit with Danamon in
Yogyakarta because I obtained an interest rate of 0.5 percent
higher than the competition. I specifically asked about the costs
of transferring the amount at the end of the deposit term and was
told clearly that it would be 1/8th of 1 percent of the amount
transferred. A quick mental calculation told me to go for it and
I was aware that it was not too out of line with banks abroad.
Recently, I transferred the deposit as planned and was told the
cost was 1 percent, eight times the agreed amount.

Furthermore, the monthly interest on my deposit was routinely
transferred to a rupiah savings account with another bank. The
conversion rate from Danamon on Feb. 16 was Rp 7,500/US$1 and,
while I expect to see minor differences between banks, Bank
Duta's rate was Rp 8,655 and Bapindo was Rp 8,800 all on the same
day. Explanations? None.

These experience with Danamon and BCA, the two largest private
banks here, makes it clear that the IMF is justified in seeking
structural banking reforms but, as an ex-customer, I hope these
reforms include moral and ethical rethinking.

Name and address

known to the editor