IBRA plans to open offices outside Jakarta

IBRA plans to open offices outside Jakarta

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
plans to establish "IBRA centers" in 11 major cities in the
country to help expedite the recovery of non-performing bank
loans owed by debtors in provinces outside Jakarta.

IBRA deputy chairman Eko S. Budianto said on Monday the
centers would provide debtors with information on the exact
amount of their debt and how to make repayments.

He said IBRA centers would be established in big cities,
including Denpasar, Surabaya, Balikpapan, Medan, Semarang and
Bandung.

"To accelerate the loan recovery process, we will open the
IBRA center in Bali by the end of this month. It will assist
debtors in making repayments," Eko told Antara on the resort
island of Bali.

IBRA currently handles over Rp 155 trillion problem loans,
most of which are non-performing, owed by some 1,600 debtors.

Minister of Finance Bambang Subianto met on Saturday with
well-connected businessmen who control the country's 200 largest
indebted companies, including Mohamad "Bob" Hasan, to push them
to sign loan recovery agreements.

The businessmen are expected to sign a "letter of commitment"
on June 22 or risk publication of their names in newspapers.

The 200 largest debtors owe some Rp 70 trillion in non-
performing loans to domestic banks, particularly state banks.

The debt recovery process has been progressing very slowly
because the businessmen have failed to agree on debt
restructuring plans forcing them to sell majority stakes in the
indebted companies to repay their debts.

Bambang has repeatedly said the debt workout program was
essential for the success of the bank restructuring program and
the country's economic recovery.

Separately, Bank Indonesia Governor Sjahril Sabirin said on
Monday the country could only benefit from the momentum provided
by the recent positive economic development, if consistency in
economic reform programs could be maintained.

"The various positive developments assure us that only with
policy consistency and extra carefulness can we solve the various
problems," he said in a speech delivered by BI's human resource
chief Maskan Iskandar in Mataram, West Nusa Tenggara province.

Sjahril was optimistic that inflation and interest rate
targets set for this year could be achieved.

He said by the end of this year inflation could be between 10
percent to 13 percent, while interest rates for the benchmark
one-month Bank Indonesia SBI promissory note could drop to
between 17 percent to 20 percent, compared to the current level
of more than 23 percent.

"And the economy is expected to have positive growth in
1999/2000," he said.

Indonesia has enjoyed negative inflation over the past three
months, providing room for the central bank to allow a drop in
domestic interest rates without threatening the exchange rate of
the rupiah against the U.S. dollar which has continued to
stabilize at Rp 8,000 to the dollar.(rei/49)