Govt finally reshuffles top management of BRI

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)