IBRA to be closed next year
IBRA to be closed next year
Fabiola Desy Unidjaja and Dadan Wijaksana, The Jakarta Post,
Jakarta
The government will close down the Indonesian Bank
Restructuring Agency (IBRA) on Feb. 27 next year as scheduled,
although the agency has yet to complete the difficult task of
forcing big debtors to repay the state.
"A limited Cabinet meeting decided that the term of duty of
IBRA remains as scheduled. So at the end of February next year,
its task will end," Coordinating Minister for the Economy
Dorodjatun Kuntjoro-Jakti told reporters after the meeting.
He said the Cabinet had ordered the National Police and the
Attorney General's Office to prepare for a legal battle against
the bad debtors.
Dorodjatun added that the government would speed up plans to
set up a deposit insurance scheme to replace the existing
government blanket guarantee scheme being handled by IBRA. Under
the latter program, the government guarantees all obligations of
closed down banks.
IBRA's remaining assets will be transferred to new holding
companies. Dorodjatun said the Cabinet would meet again in
January to work out the details of this plan.
IBRA was set up in early 1998 with a five-year term and tasked
to clean up the country's messy banking sector, which was saddled
with huge bad debts following the 1997 financial crisis.
The agency took over some US$60 billion worth of assets from
failed or ailing banks. It is mandated to restructure and sell
the assets, in the form of bank nonperforming loans and fixed
assets surrendered by indebted former bank owners, to raise cash
to help finance the state budget, which is heavily burdened by
the huge cost of bailing out troubled banks.
IBRA, which has been led by seven different chairmen, has
often faced strong criticism from the public for issuing
controversial policies that appear to benefit big debtors.
The debtors included businesspeople with huge bad debts and
former bank owners accused of violating banking regulations by
channeling most of their banks' money to their own businesses and
misusing government bailout funds at the expense of taxpayers.
Among the controversial policies were freeing some former bank
owners from their past banking crimes and selling assets at huge
discounts, which some critics said allowed the former owners of
the assets to repurchase them at big discounts.
Some analysts have said that there must be a mechanism to make
all IBRA top officials accountable for their policies.
But IBRA chairman Syafruddin Temenggung said that the agency
had done its best to execute its mandated tasks.
He said the agency had posted a respectable recovery rate of
28 percent for the assets under its control, which was higher
than the recovery rates of similar agencies in countries such as
China (8 percent) and Thailand and South Korea (about 25
percent).
He also said the country's banking sector had been
restructured and all the banks were healthy, with some having
been even divested.
The agency has so far sold majority stakes in Bank Central
Asia (BCA), Bank Danamon, Bank Niaga and Bank Internasional
Indonesia (BII), and plans to wrap up the sale of controlling
stakes in Bank Lippo and Bank Permata early next year.
List of IBRA's unfinished businesses
1. Still holds a minority ownerships in BCA, Danamon, Niaga, BII
and other banks. A holding company is expected to be established
to manage and sell these assets.
2. About Rp 43 trillion worth of bad loan assets, the majority of
which come from five companies -- textile giant Texmaco (Rp 27
trillion), aircraft maker Dirgantara Indonesia (Rp 2 trillion),
Bali Nirwana Resort (Rp 2 trillion), Tirtamas Group (Rp 3
trillion), Dipasena (Rp 4 trillion) -- are still unsold. A
holding company is also expected to be established to manage
these assets.
3. Of the 39 former bankers who agreed to settle their debts
through various schemes (MSAA, MRNIA, APU), nine have been
declared uncooperative and reported to the courts.