Ginandjar downplays rift with IMF on bank closures

Mon, 08 Mar 1999 | Source: DJ

PHUKET, Thailand (Dow Jones): Indonesia's Coordinating Minister for Economy, Finance and Industry, Ginandjar Kartasasmita, Saturday played down any rift with the International Monetary Fund (IMF) over its decision to postpone an announcement on bank closures.

Ginandjar, who is attending an Association of Southeast Asian Nations (ASEAN) economy ministers meeting, said in an interview Indonesia shares IMF First Deputy Managing Director Stanley Fischer's concerns but had to delay in order to give banks time to raise fresh funding to avoid closure.

The IMF is leading a US$43 billion bailout program for Indonesia's troubled economy.

Of course, Mr. Fischer's concerns are our own concerns," Ginandjar said. "If we had the chance, we didn't want to delay it."

The minister said the government will consider banks' amended recapitalization plans on Monday before deciding which to close on March 13. Indonesia was previously set to disclose which banks it intends to shut late last month.

Ginandjar said he hadn't yet seen the revised plans, which were submitted Wednesday, and so couldn't comment on whether any banks previously slated for closure will be saved.

According to Ginandjar, the announcement next week will be transparent, with banks that don't meet capital-adequacy standards facing closure whatever their political connections.

"We have a very strict criteria, and we are going to follow that criteria," he said.

Analysts say the delays have further undermined Indonesians' confidence in their banking system and make funds in the country's financial system more scarce.

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