IBRA launches overhaul plan to boost efficiency
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) announced a major overhaul including plans to cut down the number of consultants.
IBRA chairman I Putu Gede Ary Suta said on Friday that the changes were made as an effort to increase efficiency in the agency and to speed up the disposal of assets.
"We've been accused of working too slow, we want to change that," he said in a media conference here.
Ary Suta noted that almost one third of IBRA's expenditures comprised payment for the large number of consultants working for the agency. He cited that the Asset Management Credit (AMC) unit of the agency alone budgeted Rp 700 billion (US$7.3 million) for consultants.
In the new IBRA organization, to be made effective early next week, all consultants would be centralized under a Consulting Management Unit, which will reselect those to work for IBRA, Ary Suta said.
"Any of IBRA's units wishing to use a consultant must choose one of the consultants already in the CMU's list and the CMU will draw a term of reference for it," he said.
The CMU is one of six new units introduced by Ary Suta for his overhaul plan of IBRA.
The other five units are the appointment of a chief financial officer (CFO), an asset disposal coordinator, a customer care unit, general legal counsel and a litigation unit.
Besides the major changes taking place inside the agency itself, Ary Suta said that he would also introduce changes to the way the agency works.
Ary Suta said that to speed up the asset disposal program, which had been criticized for being too slow, he would offer indebted state enterprises a 25 percent reduction on their debt principals and private corporate debtors a lower dollar rate to prompt them to settle their debts this year.
State enterprises that owe debts of under Rp 1 trillion are entitled to a 25 percent reduction on its principal debt when paying in cash, he said.
"Furthermore, they are entitled to receive 100 percent reduction for interest overdue and fines," Ary Suta added.
He said that in a meeting on Thursday with the director general of state-owned enterprises, I Nyoman Tjager, at least 44 companies were entitled to the debt cut and that they should be able to finalize their credits within two or three weeks.
Private corporate debtors would also be offered a lower dollar rate, set at Rp 7,800 per U.S. dollar, for those wishing to pay their debts by cash this year, Ary Suta said.
"This was considered an incentive and we've seen the number of debtors making a cash settlement increase since our announcement last month," he said.
Ary Suta said that he would also try to make the agency more objective in its role by asking its senior management to let go of their roles in banks and companies currently under IBRA's supervision.
He said that he had noticed that many of IBRA's executives were also holding managerial posts at several companies under the care of the agencies.
"Some even have positions in seven to 13 companies," Ary Suta said.
He said that the dual role of executives would only lead to a conflict of interest, which should be avoided at all costs.
Ary Suta added that the executives would be given 14 days to consider their move, whether to stay on as an IBRA executive or whether to withdraw from the agency and assume a role in the companies.(tnt)