IBRA strives to boost legal power
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) is seeking to boost its legal power in a bid to bolster the legitimacy of its decisions, a senior official has said at the agency.
IBRA legal division head Pandu Djajanto said on Tuesday that the agency would propose to the President to upgrade the legal basis governing the agency to a government ruling in lieu of the law.
IBRA is currently directed under Government Regulation No. 17/1999.
Speaking at a news conference, Pandu said the agency's decisions were often overruled by higher rulings as proven by its recent failure in a commercial court battle to force a bad debtor to repay its obligation.
He explained that strengthening the agency's legal status would help accelerate the restructuring and recovery of the bad loans under its management, and to ensure former bank owners repay their obligations to the government.
Many former bank owners and bad debtors are politically well- connected businessmen.
Pandu said the agency would submit the draft of the recommended change to the government later this month.
He expected the House of Representatives to subsequently enact the new ruling.
But many analysts have criticized that the ruling already gave IBRA excessive power.
Separately, finance minister Bambang Sudibyo said on Tuesday that he was not aware of the agency's demand to upgrade its legal status.
"I'm not aware of the demand. I have to think this over carefully. I have to check the problem," he told reporters on the sidelines of a hearing with the House budget committee.
IBRA currently controls over Rp 600 trillion worth of various bank assets, including ownership in companies or in the form of nonperforming loans (NPLs) transferred by closed banks, nationalized banks or recapitalized banks.
The agency has been criticized for its slowness and indecisiveness in dealing with bad debtors.
Another IBRA official, Andreas Bunanta, separately said on Tuesday that the agency now controlled a total of Rp 250 trillion in NPLs after state Bank BNI transferred some Rp 19 trillion worth of NPLs last week.
He said Rp 15 trillion of the loans were owed by the Texmaco textile conglomerate, making it the agency's largest debtor.
Andreas said state Bank Mandiri was also expected to transfer its remaining Rp 16.5 trillion NPLs to the agency by the end of this month.
He added that state Bank Rakyat Indonesia would also soon transfer its NPLs.
Banks joining the government recapitalization program have to transfer their NPLs to create a clean balance sheet.
Pandu said the agency was also considering taking legal action against former owners of four closed banks who had not yet paid their obligations to the government.
Many former bank owners have pledged various forms of fixed assets to repay their obligations.
Pandu added that the agency would propose to the government to lift the travel ban on 137 former bank owners and senior management as they had completed the settlement of their obligations.
The government has slapped a travel ban on some 206 former bankers and bank owners. (rei)