IBRA to be audited soon, says Bambang

IBRA to be audited soon, says Bambang

JAKARTA (JP): Minister of Finance Bambang Sudibyo said on
Monday the government would appoint an independent auditor to
audit the Indonesian Bank Restructuring Agency (IBRA) in January
in a bid to improve transparency.

The minister said the audit was also aimed at detecting
"problems" at IBRA and to boost the agency's performance.

"We will appoint an independent auditor for this purpose," he
told House Commission IX on financial and development planning
affairs at a hearing session.

He said the audit would be financed by the International
Monetary Fund (IMF), but disclosed no further details.

Bambang acknowledged that IBRA had been slow in restructuring
the country's banking sector as well as in recovering the
industry's bad assets.

He said the agency was facing particularly severe difficulties
in dealing with large bad debtors banks, which are mostly
controlled by well-connected businessmen.

"The problem faced by IBRA is immense, not equal to the number
of its staff members. But in addition to that, the competency of
its staff members is questionable," Bambang said.

IBRA, a unit of the finance ministry, was launched early last
year, with a mission to help the government restructure the
country's battered banking sector and to raise funding to finance
the program.

The agency currently controls some Rp 600 trillion worth of
various bank assets, including some Rp 230 trillion in the form
of non-performing bank loans (NPLs).

These powers have led IBRA to become the country's largest and
most powerful economic vehicle.

But there has been increasing concern that IBRA has been slow
in recovering the NPLs, and legislators have also questioned the
transparency of IBRA in dealing with the bad debtors.

The outbreak of the high-profile Bank Bali scandal has also
put IBRA's credibility at stake.

The Bank Bali scandal centers around the illegal transfer of
some US$80 million from the bank to a company linked to several
influential people close to former president B.J. Habibie.

Bambang said that in the near future there would be more
steps taken to improve transparency at IBRA.

He said the lack of transparency had partly contributed to
IBRA's slowness.

He said that with greater transparency, IBRA would gain the
public's support to expedite its programs, including ways of
dealing with the noncooperative bad bank debtors.

"Public control can become a type of pressure for IBRA to work
harder and faster," Bambang said.

Early last month, Bambang was reported to be planning to
replace IBRA chairman Glenn S. Yusuf. The rumor was quashed by
senior economic ministers.

While the top echelon of the Finance Ministry accompanied
Bambang at Monday's hearing session, Glenn was not present.

Bambang also informed legislators of the government's plans to
revise the membership of the Financial Sector Action Committee
(FSAC), which groups several senior economic ministers and Bank
Indonesia's Governor.

The committee has a mission to oversee the country's banking
sector reform.

Bambang said that since Bank Indonesia had become an
independent central bank, its Governor would no longer be a
member of the FSAC, and would be replaced by the attorney
general.

He said Bank Indonesia would only be an advisor to the FSAC.

Chairman of the Independent Review Committee Mar'ie Muhammad
recently criticized the FSAC for failing to do its job properly.
He said the committee's failings partly contributed to the
various scandals hitting the country's banking sector. (rei)