Govt to set up team probe private banks
JAKARTA (JP): The government said yesterday it would soon establish a special team to probe possible fraud in the use of Bank Indonesia's liquidity credits given to private banks.
Minister of Justice Muladi said yesterday the team would investigate all the private banks which had received liquidity credits from the central bank.
"All banks -- healthy or not, with or without problems -- which have used BI's liquidity credits will be investigated," Muladi told reporters after a meeting at the office of Coordinating Minister for Development Supervision/Administrative Affairs Hartarto Sastrosoenarto.
The team, consisting of his ministry, the National Police and the Development Finance Comptroller, will examine whether there was an "element of deceit" in the banks' use of the financial support.
Banks considered deceitful are those which spent the government's money for their own private interests and caused the government losses.
The Attorney General's Office will handle the corruption cases while any criminal offenses will be directed to the National Police.
"Our priority is to resolve the administrative aspect of the cases in the civil court so that we can get the money back. Any criminal charges would follow thereafter," Muladi said.
All the banks which received the central bank's liquidity credits would be examined before charges were brought, he said.
Bank Indonesia's latest report cited that its liquidity support to troubled banks under the supervision of the Indonesian Bank Restructuring Agency (IBRA) totaled Rp 135.58 trillion (US$11.79 billion) as of Aug. 14.
Seven of the banks under IBRA, including the recently nationalized Bank Central Asia (BCA), Bank Danamon, Bank Tiara Asia and Bank PDFCI, and the suspended BDNI, Bank Umum Nasional (BUN) and Modern Bank received central bank liquidity support equivalent to more than 500 percent of their capital. They also violated the legal lending limit.
IBRA announced in June that Bank Tiara had received Rp 2.44 trillion in central bank liquidity support, PDFCI Rp 2.5 trillion and BUN Rp 6.6 trillion.
Bank Indonesia Governor Sjahrir Sobirin said yesterday BI would turn over six liquidated banks to the police for investigation within the next two days.
Yesterday's meeting was also attended by Attorney General Andi Galib, Deputy National Police chief Lt. Gen. Lutfie Dahlan, Minister of Finance Bambang Subianto, and IBRA Chairman Glenn S. Yusuf.
World Bank
Earlier yesterday, Hartarto met with the World Bank's country director for Indonesia, Dennis de Tray, State Minister of National Development Planning Boediono and BPKP officials to work on efforts to reduce rampant corruption, especially in World Bank-financed projects.
De Tray said the World Bank was working on a program to help the government reduce graft practices in the country.
"My staff are going to meet with Pak Hartarto's staff tomorrow (today) afternoon to put together the plans," De Tray told reporters after the meeting.
He described the meeting as "constructive", but declined to give more details.
The Asian Wall Street Journal, quoting a World Bank memorandum, reported last week that Indonesian officials were believed to have siphoned off more than 20 percent of the bank's loans to Indonesia.
Hartarto said the government and the World Bank would disclose the report and the efforts to eradicate corruption to the public next week. (das)