Govt to expose bad bankers

Govt to expose bad bankers

JAKARTA (JP): Finance Minister Bambang Subianto vowed to the
House of Representatives on Monday he would reveal the complete
"black list" of bad bankers some time in the middle of this
month, in a bid to regain credibility over the costly bank
restructuring program.

He said that the announcement of the government bank
recapitalization program, which was delayed on Friday by at least
two weeks, would include such details as the names of blacklisted
bankers, banks that have gone bust through unsound practices,
bankers' debts (management and shareholders) and companies
related to them, violations of the legal lending limit, and other
breaches of prudential regulations.

"The information will be as complete as possible so that the
decision-making process for the bank restructuring program is
reported as transparently and comprehensively as possible," he
told legislators at a hearing.

Under the government bank restructuring program, errant
bankers and owners will not be banned from operating or owning
banks.

Other details to be stipulated in the bank closure
announcement include banks' debts to the central bank, their
positions in the interbank market, large-scale bad debtors and
the core elements of the business plans of banks to be
recapitalized, according to Bambang.

Many people including legislators were shocked by Coordinating
Minister for Economy, Finance and Industry Ginandjar
Kartasasmita's announcement on Friday that the move on bank
closures and recapitalization, scheduled for Feb. 27, would be
delayed by at least two weeks.

The government was to announce the liquidation of some 40
banks, to name banks which need to be recapitalized and those
which did not have to undergo the process.

The delay has prompted criticisms that the government had been
inconsistent and seemed to validate the rumors that some
lobbyists had succeeded in alerting top political leaders to
their plight.

Some informed sources have said that several owners of banks
due to be closed down had threatened that they might disclose
the names of senior government officials who had transferred
large sums of money overseas through their banks following the
deepening of the financial crisis and the fall of former
president Soeharto last May.

Deputy chairman of the Indonesian Bank Restructuring Agency
Farid Harianto asserted Saturday that the delay was based on
political considerations.

Former mining and energy minister Subroto agreed, saying that
the government would not dare to close so many banks because of
fears of rising unemployment around the June general election.

Bambang, however, flatly dismissed the allegations.

He told the legislature that the time provided by President
B.J. Habibie (who explicitly set the Feb. 27 deadline) was not
enough for the evaluation teams to review business plans proposed
by banks intending to join the recapitalization program, and to
prepare a systematic and comprehensive report on the program.

"The decision for the delay comes after we have consulted the
IMF, World Bank, and the Asian Development Bank, which foresaw
the need for a postponement of between two and four weeks," he
said.

The three international multilateral institutions are
providing the country with a multibillion dollar bailout to
finance the economic reform program designed to lift Indonesia
out of its 18-month economic crisis.

Bambang promised the House that the two week delay would by no
means be aimed at saving certain banks from the liquidation axe.

"We will do our best to maintain the credibility of the
banking reform, a key factor for economic recovery," he asserted.

Bambang, Ginandjar, and Bank Indonesia Governor Sjahril
Sabirin were busy over the weekend holding press conferences and
briefings to explain the technical grounds for the postponement.

The bank recapitalization program, which is projected to
require some Rp 300 trillion (US$35 billion), involves a large
amount of taxpayers' money.

During the 1999/2000 fiscal year starting in April the
government will spend at least Rp 17 trillion to pay the interest
charges on its own bonds in order to finance its 80 percent share
of the recapitalization funding.

Out of the country's 200 commercial banks, the government said
in January that only 66 banks were eligible to join the
recapitalization program.(rei)