IBRA pays Rp 25.84t in guarantee fund
IBRA pays Rp 25.84t in guarantee fund
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
has paid out some Rp 25.84 trillion (US$3.11 billion) since the
government's guarantee scheme for the obligations of commercial
banks began in early 1998.
IBRA deputy chairman Jerry Ng said on Tuesday about Rp 21.04
trillion was used to repay depositors money in closed down banks,
Rp 4.20 trillion to cover interbank transactions, Rp 363.05
billion to cover trade financing and Rp 263.49 billion for
foreign commercial borrowings and remittance.
"The amount of guarantee funds already paid by IBRA as of July
31, 2000, reached Rp 25.84 trillion," Jerry said during a media
conference.
"The greatest benefits of the government guarantee scheme are
enjoyed by the general public, namely the 1.6 million
depositors," he added.
The government launched the guarantee program to help revive
confidence in the banking industry following the closure of some
16 banks in November 1997, which triggered massive runs and a
halt in international credit lines.
Under the scheme, the government guarantees the obligations of
closed down banks to depositors and creditors, both domestically
and overseas.
Since the financial crisis first struck in the middle of 1997,
the government has closed down some 66 commercial banks in a bid
to restructure the ailing banking industry.
The government guarantee scheme came into effect on Jan. 26,
1998, and was originally planned to run through Jan. 31, 2001.
However, IBRA must make an announcement six months prior to
the guarantee scheme being ended. Since no announcement was made
in August, the guarantee program will continue beyond this
initial deadline.
Jerry said the guarantee funds provided by IBRA were based on
Presidential Decree No. 26/1998, which was followed up by the
issuance of two decrees by the finance minister.
The guarantee funds from IBRA do not include the emergency
funds injected by Bank Indonesia into ailing banks. The central
bank has issued some Rp 144.5 trillion in emergency liquidity
support to 48 commercial banks, to help them cover mass
withdrawals by panicked depositors.
But a recent investigative audit by the Supreme Audit Agency
(BPK) revealed more than Rp 138 trillion of the emergency loans
had been misused by the bankers. BPK placed part of the blame for
this misuse on the weak supervision of the central bank.
The Attorney General's Office is currently investigating the
alleged abuse of the liquidity support.
Attorney General Marzuki Darusman said recently that in the
first stage, the investigation would focus on 10 banks. He also
said there had been efforts by some bank owners to destroy
evidence.(rei)