IBRA, BI under fire from bankers over slow payment
JAKARTA (JP): Bankers lashed out on Wednesday at Bank Indonesia (BI) and the Indonesian Bank Restructuring Agency (IBRA) for their slow repayment of interbank claims on closed- down banks now under IBRA control.
Chairwoman of the National Private Banks Association (Perbanas) Gunarni Soeworo said many banks were frustrated and tired of waiting for repayment of the claims.
"We have been engaged in many meetings with IBRA and BI in the hope of accelerating the repayments, but the results fall far short of our expectations. We've been waiting for too long," she said shortly before attending a meeting with the central bank and other bankers.
"Why does the verification process take so long?" she asked, referring to statements by Bank Indonesia and IBRA officials that the authority had to verify claims before making repayments.
Gunarni was unable to provide the exact figure of interbank claims yet to be paid back by IBRA, only saying it was substantial.
The government has closed down 66 banks since the economic crisis began in mid-1997. Under the government blanket guarantee scheme, obligations of closed-down banks, including time deposits and interbank claims, are guaranteed by IBRA, an agency under the Ministry of Finance.
Concern over slow repayment of the interbank claims emerged after Bank Bali was reportedly able to claim Rp 904 billion from its interbank loans to the now defunct Bank BDNI with the assistance of PT Era Giat Prima (EGP), a private firm acting to recoup the credit.
Banking legal expert Pradjoto alleged last week EGP and an IBRA senior official colluded to force Bank Bali to pay a huge commission fee for the third-party service.
EGP denied the claim, saying it was not a debt collector but an investment firm buying out loans at a discount.
The controversy also raised a question as to why Bank Bali sought the help of EGP to recoup claims supposedly guaranteed by the government.
Indra Widjaja, president of Bank Internasional Indonesia (BII), shared Gunarni's concern.
Indra said BII's interbank claims to 10 closed-down banks amounted to Rp 3.8 trillion.
"We have not yet been repaid," he said, adding that it was appropriate to use the service of a third-party rather than risk losing the claims.
Bank Indonesia Governor Sjahril Sabirin said on Wednesday use of a service provided by firms like EGP was a normal business procedure.
"The important thing is that the transaction is valid following a verification procedure," he said prior to the meeting with bankers.
He said IBRA had repaid the interbank claims of 12 banks.
"We will pay all interbank claims on closed banks as long as they're valid. That's why we need to first verify the claims."
The remarks contradicted Sjahril's statement on Tuesday that a third-party service was not needed to obtain reimbursement of interbank loans from IBRA. He said such claims, provided they met the prescribed terms, were fully covered by the government's guarantee scheme.
But a banker who requested anonymity questioned why IBRA only paid Bank Bali after it agreed to use the services of EGP, which is owned by Setya Novanto, deputy treasurer of the ruling Golkar party.
President of Bank Prima Express Wibowo Ngaserin speculated the Ministry of Finance had other priorities, with the repayment issue not at the top of the list.
"In addition, it is not easy to make verifications," Wibowo said.
"You can imagine the workload at IBRA, which only has some 400 staff members."
IBRA was established early last year to help the government restructure the country's banking sector.
The agency currently controls over Rp 600 trillion worth of bank assets. The banks were closed down or are being restructured and sold to raise proceeds to help finance government bank restructuring and recapitalization programs costing an estimated Rp 550 trillion. (rei)