Dragon Bank warned

JAKARTA (JP): The government will take measures against the representative office of Dragon Bank International Ltd. of Vanuatu if the bank is found to be engaging in commercial banking activities here.

"It is illegal for any representative office of a foreign bank to perform such activities here," State Minister of Investment Sanyoto Sastrowardoyo said yesterday in response to a press report that the Dragon Bank's representative office in Jakarta was working towards commercial operations.

Bisnis Indonesia reported last week that the Dragon Bank's representative office had offered arrangements of syndicated loans to a number of local customers, including banks.

Paul Soetopo Tjokronegoro, a director of Bank Indonesia (the central bank), was quoted by the daily as saying that his party was investigating the activities of the Dragon Bank's representative office.

Paul said that if a foreign bank representative office wants to engage in liaison or promotional activities in Indonesia, it has firstly to acquire a license from the Minister of Finance. Such licenses are obtainable only with a recommendation letter from the central bank.

However, the license from the investment minister does not permit a foreign bank to engage in commercial activities in Indonesia.

"Our office does not issue any licenses for foreign banks to engage in commercial operations here. We give licenses to foreign banks' representative offices to carry on promotional activities only," Sanyoto said. (rid)