Govt urged to declare nation's top debtors

JAKARTA (JP): The government should announce the names of the nation's top debtors and investigate if they were involved in improprieties which have brought the country's banking industry to its knees, a senior banking analyst said Monday.

"Nobody dared to name the debtors and investigate them in the past, but the government should do that now," said Thomas Suyatno, a former executive of the Federation of Indonesian Private Banks (Perbanas).

Bank Indonesia, the central bank, has said several times that it had checked the quality of credits channeled to the country's 50 top debtors, but it never disclosed their names or the results of its study.

Thomas said in its current efforts to restructure the country's banking industry, the government should also thoroughly check the total credit channeled by the banks to them and the amount of the debts which ultimately became bad.

If proof surfaced of improprieties, the government should take action against the suspects in accordance with the law.

"Thus far, the government appears to be focusing on (investigating) negligent bankers and letting the creditors who also took part in putting the country's banking industry into trouble walk free," Thomas was quoted by Antara news agency as saying.

Law enforcement agencies, including the Attorney General and the police, have questioned several bankers for allegedly misusing the liquidity support given by the central bank to their respective institutions and for violating the legal lending limit.

The Attorney General last week started questioning several bank officials and owners, including Mohamad "Bob" Hasan, the long-time golfing partner of former president Soeharto.

The central bank is believed to have channeled Rp 140 trillion (over US$12 billion) in liquidity support to commercial banks to help them weather the monetary crisis which has been battering the nation for more than a year.

The police have also summoned executives and owners of Bank Andromeda, including Soeharto's son Bambang Trihatmodjo, for questioning on charges of violating the legal lending limit. The bank was among the 16 banks which were liquidated in November last year.

A senior executive of the Indonesian Bank Restructuring Agency (IBRA), Farid Harianto, said last month the major obstacle faced by the agency in restructuring the country's ailing banks was the huge amount of nonperforming loans.

The loans were estimated to reach Rp 376 trillion as of June this year, accounting for 48 percent of the total commercial banks' credit of Rp 626.5 trillion.

IBRA, which was set up in January to restructure ailing banks and recover the central bank's liquidity support, has established the asset management unit (AMU) to absorb nonperforming loans.

But Farid, who heads the unit, said that recovering bad loans would not be easy because of conflicting interests in the government and legal impediments to the sale of troubled banks' assets. (jsk)