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.