Govt urged to reveal 40 banks under IBRA care

JAKARTA (JP): The government has a moral responsibility to disclose the names of 40 banks currently under the Indonesian Bank Restructuring Agency (IBRA)'s supervision, economists said.

"The banking sector has made the whole country suffer, so it is not fair to leave the people out in the cold without letting them know what is happening and the various reasons for the situation," Sri Edi Swasono of the University of Indonesia said yesterday at a seminar.

Anwar Nasution, from the same university, said separately that identifying the 40 banks would also help improve the government's image, which has been eroding since a series of measures failed to help the country cope with the economic crisis.

"It is better that (the names of) these banks are made public so that they do not just assume anymore," Anwar said.

"Right now, people have no idea which banks are healthy and which are not."

IBRA suspended the operation of seven private, insolvent banks and took over the ownership and management of six private, ailing banks and one state-owned bank on April 4.

There are another 40 ailing banks currently under IBRA supervision, but the agency has not disclosed the names of the banks for unknown reasons.

On Nov. 1 last year, Bank Indonesia also closed down 16 private banks, which prompted the public's confidence in local banks to crumble.

Sri Edi said the government had a responsibility to disclose the names of the banks out of respect for the people, even though the action might prompt a massive run on banks such as those after the bank closures.

"Would you lie to the people just to avoid such a run?"

One of the most important parts of economic reform is transparency, he said.

The government has so far been helping the banking sector excessively, and it has not been careful or prudent in its measures to protect the people, he added. (das)