IBRA promises full compensation

IBRA promises full compensation

JAKARTA (JP): Around 12,000 employees who will lose their jobs
as a result of the closure of three badly managed banks will
receive twice as much compensation as they are entitled to under
existing labor regulations, the Indonesian Bank Restructuring
Agency (IBRA) announced yesterday.

It said in a letter sent to all employees of Bank Dagang
Nasional Indonesia (BDNI), Bank Umum Nasional (BUN) and Bank
Modern that the banks would pay them compensation in accordance
with Ministry of Manpower regulations.

IBRA would then ask the owners of the three banks to match the
compensation paid to employees by the banks.

"In fact, the terms offered to the employees are substantially
better than the minimum specified in the regulations," IBRA said
in a statement.

It said the compensation package was intended to ensure the
needs of individual employees were met while at the same time not
placing too great a burden on the taxpayer.

In addition to the compensation, all employees of the frozen
banks will get their salaries for August and September, IBRA
said.

IBRA called on the employees who had just lost their jobs and
other people in the banking industry to "step back and look at
the bigger picture."

It said suspending the operations of troubled banks would lead
to recovery in the banking industry.

Despite the closures, IBRA said employment opportunities would
be found in the sector once better managed banks began to benefit
from a "flight to quality" deposit move and expanded their
operations.

It cited state Bank Negara Indonesia (BNI) and privately-owned
Bank Bali and Bank Lippo as examples.

It quoted BNI president Widigdo Sukarman as saying the bank
needed to recruit new personnel capable of offering a high level
of service as more and more new accounts were opened.

"We are also looking closely at plans to open new outlets,"
Widigdo added.

IBRA cited Bank Bali president Rudy Ramli as saying that it
too needed more staff to support a planned expansion, and Bank
Lippo president Eddy Sindoro, who recently said: "We have been
reviewing our resources, our existing network will need to be
strengthened and service levels raised to meet the upswing in
demand." (rid)