Govt to reimburse BDB depositors

Govt to reimburse BDB depositors

The Jakarta Post, Jakarta

The government has decided to honor about Rp 104.7 billion
worth of assets in more than 34,000 incomplete accounts in
bankrupt Bank Dagang Bali (BDB) and will start reimbursing these
and other depositors by the end of the month, an official
statement says.

The reimbursements, which are part of payouts to depositors
with 121,104 verified accounts in the bank, include about 34,000
accounts that investigators had earlier said were not backed up
by proper documents.

However, to secure the payments, these depositors still needed
to get written confirmation from the bank's liquidation team
verifying their claims, the statement from the Bank Deposit
Guarantees Unit (UP3) says.

The UP3, a unit under the Ministry of Finance, is tasked with
carrying out the blanket guarantees program, which reimburses
claims from depositors in banks that have been declared bankrupt.

"The decision to honor the 34,000 accounts was determined by
the minister of finance (Boediono) upon considering input from
the central bank governor (Burhanuddin Abdullah)," the statement
says.

BDB, along with Bank Asiatic, was closed down in May due to a
worsening in its finances stemming from alleged illegal
transactions between the two banks involving bad loans worth Rp
1.2 trillion. Bank Indonesia has said that the banks, owned by
two families connected by marriage, had violated prudential
banking regulations, causing irredeemable liquidity problems.

The UP3 has declared the 121,104 accounts in BDB "clear",
meaning the holders could expect reimbursement. The verification
was conducted by the State Development and Finance Comptroller
(BPKP).

"So far, the UP3 has paid 47,318 BDB account holders a total
amounting to Rp 797.9 billion and in U.S. dollar worth $196,000,"
it said.

For the payments of claims in both BDB and Asiatic, the
Ministry of Finance has set aside Rp 1.4 trillion,

All payments to depositors come from state Bank Negara
Indonesia (BNI).

The government has decided to continue paying BDB depositors
despite a court ruling that put on hold the central bank's
decision to liquidate the bank.

Former BDB management said the ruling meant they could take
back control of the bank, which is currently managed by a
government-sanctioned liquidation team.

However, Bank Indonesia has made a move to counter the ruling
and the case is still being examined by the Administrative Court.