Govt finally reshuffles top management of BRI
JAKARTA (JP): After months of controversy, the government announced on Tuesday that it reshuffled the top management of state Bank Rakyat Indonesia (BRI) to allow recapitalization of the bank to proceed.
Minister of Finance Bambang Sudibyo appointed in a decree senior banker Rudjito as the new BRI president, replacing Djokosantoso Moeljono.
The decree also named six new directors to the bank, and another separate decree appointed the bank's new president commissioner and three new commissioners.
The six new directors are Gayatri Rawit, A. Askandar, Krisna Wijaya, Wayan Alit Antara, Hendrawan Tranggana and Akhmad Amien Mastur.
The new chief commissioner is Sukadji Ranuwihardjo, and the three new commissioners are Ronny Muntoro, Arbali Sukanal and Syahrial Hamid.
The International Monetary Fund (IMF) has demanded the government change the management of state banks as a precondition for the recapitalization of the bank.
The management reshuffle of BRI was part of the government's promise, outlined in the letter of intent to the IMF, which must be completed by the July 20 deadline.
But the plan to change the bank's top management was plagued with controversy after President Abdurrahman Wahid's choice, Prijadi Praptosuhardjo, reportedly failed to pass Bank Indonesia's fit and proper test.
Bank Indonesia Governor Sjahril Sabirin said the President had demanded the central bank repeat the fit and proper test, but Bank Indonesia rejected the appeal unless there was new information.
Sjahril is being held at the Attorney General's Office for alleged involvement in the high-profile Bank Bali scandal.
Prijadi was previously a director at BRI. The fit and proper test is conducted based on a banker's past track record to check whether the candidate violated any banking rulings.
In a bid to avoid a reoccurence of a banking crisis in the future, the central bank has stipulated that people running the country's banks must pass the fit and proper test.
The 54-year-old Rudjito has a well-established career in state banks, but his last position was president of PT Kliring Penjaminan Efek Indonesia, a securities clearing agency.
Rudjito said the government was scheduled to meet with the House of Representatives on Friday to seek approval of the bank's recapitalization program.
Cost of recapitalization of BRI was initially estimated at Rp 29.2 trillion if the recapitalization program was completed in May. The government will inject bonds to recapitalize the bank.
The cost is expected to increase due to the delay.
"My goal is to turn BRI around to become a profitable bank in three to four years time," Rudjito said, following the handover ceremony.
He added that he would also try to fulfill BRI's business plans, including to help the bank increase its exposure to microfinancing business, which currently is at 70 percent of total outstanding credit.
BRI has total assets of about Rp 34 trillion. Its capital adequacy ratio (CAR) is minus 118 percent. The recapitalization program would boost its CAR level to 4 percent.
BRI outgoing president Djoko claimed that the bank had enjoyed a positive net interest rate margin since September last year.
He added that the bank had also managed to restructure some Rp 5.8 trillion in nonperforming loans.
Djoko said the achievements caused the recapitalization cost to drop to Rp 29.2 trillion from Rp 31.6 trillion budgeted by the government in 1999. (rei)