Ginandjar downplays rift with IMF on bank closures

Mon, 08 Mar 1999, 00:00 WIB | 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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