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)