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)