IBRA may take control of BCA

JAKARTA (JP): Bank Central Asia (BCA), the country's largest bank, may soon be put under the control of the Indonesian Banking Restructuring Agency (IBRA) following days of fund withdrawals, banking sources said yesterday.

The banking sources said IBRA could take over control of the bank as early as today, as its liquidity had fallen below acceptable levels.

Central bank sources said the documents to authorize the move were being drawn up yesterday,Dow Jones Newswires reported.

"My banking colleagues believe that the bank may be put under IBRA tomorrow (today), but it could also be on Saturday, as crucial moves are not usually done on a weekday," a state bank executive told The Jakarta Post.

IBRA is a government body set up in January to help rehabilitate the banking sector. A number of criteria are used to determine which banks are placed under its direct supervision.

Banks are, for example, suspended if they have received liquidity credits from the central bank equivalent to more than five times their total equity, or equal to 74 percent of their total assets.

If they have received government liquidity credits in excess of Rp 2 trillion, or an equivalent sum equal to more than five times their total equity, their management are put under the control of IBRA.

Banks are put under supervision of IBRA, if they have received liquidity credits equivalent to more than 200 percent of their capital and which have a capital adequacy ratio below 5 percent.

The source said BCA's "severe bleeding", which increasingly worsened over the last 10 days, could no longer be covered by financial injections from either the central bank or the bank's owner, the Salim Group.

"The central bank's liquidity assistance has already met the tolerable limit," the source said.

The Salim Group owns 70 percent of the bank, while former president Soeharto's children Sigit Hardjojudanto and Siti Hardijanti Rukmana own the remaining 30 percent.

Bank Indonesia said Tuesday it would extend liquidity assistance to BCA of up to 200 percent of its paid-up capital. The bank's owners earlier pledged to inject about Rp 1 trillion in fresh funds into the bank after the run on it began last week.

BCA, the country's largest bank, has long been susceptible to rumors. Early this year, it was rumored that Salim Group's founder and owner, Liem Sioe Liong, had died, prompting massive cash withdrawals from the bank.

Customers began to line up outside the bank's branches and automatic teller machines (ATMs) on May 19, following massive riots in the city, during which many of BCA's branches and ATMs were destroyed. The queues grew over the days.

Yesterday, several of the bank's branches and ATMs were still swamped by customers taking out their money.

The Matraman Branch in East Jakarta was inundated with customers yesterday morning, causing a traffic jam in the area.

By late afternoon, however, there were fewer customers at some of branches.

The bank installed nine additional machines next to the three existing ones at its drive through ATM center on Jl. Sudirman. The additional machines were only for withdrawals.

A security guard there said there were queues of only four or five people at each machine throughout whole day. (das)