IBRA to deal with interbank claims: BI
IBRA to deal with interbank claims: BI
JAKARTA (JP): Bank Indonesia Governor Sjahril Sabirin said on
Monday the central bank would no longer be involved in the
process of verifying interbank claims guaranteed by the
government.
He said the verification would be the sole responsibility of
the Indonesian Bank Restructuring Agency (IBRA).
"Based on our discussions with IBRA, we have temporarily
agreed that it (the verification) will be the sole responsibility
of IBRA," Sjahril told reporters after a meeting with House of
Representatives leaders.
Sjahril said that IBRA could ask a third party to help in the
verification process, depending on the capacity of the agency's
human resources.
The government launched a blanket guarantee program early last
year whereby all obligations of closed down banks, including
deposits and interbank claims, were fully guaranteed by the
government.
Bank Indonesia and IBRA were given the authority to verify
claims on closed down banks.
The blanket guarantee program was launched in a bid to prevent
a complete breakdown of the country's banking system as
confidence in the industry plunged to its lowest point last year.
But the outbreak of the high profile Bank Bali scandal in the
middle of this year showed that the blanket guarantee program was
prone to abuse by both the country's banking authorities and
politicians.
The Bank Bali scandal centers on the transfer of some Rp 546
billion from the bank to PT Era Giat Prima (EGP) as a commission
for the private firm to help the bank in recouping some Rp 904
billion in interbank claims on a closed down bank.
The government has insisted that Bank Bali didn't have to use
the services of EGP because the claims were guaranteed by IBRA, a
unit of the finance ministry.
The PricewaterhouseCoopers audit on the scandal concluded that
there were indications of "fraud" and "corruption" in the Bank
Bali-EGP transaction.
The report, released to the public recently, named several top
banking authorities, including IBRA and Bank Indonesia officials
and influential businessmen allegedly involved in the scandal.
The report also found irregularities in the processing of Bank
Bali's inter-bank claims by IBRA and Bank Indonesia and
recommended further investigations of Sjahril and former finance
minister Bambang Subianto.
IBRA has suspended payment of interbank claims on closed down
bank following the Bank Bali scandal, pending the completion of
an independent audit by Ernst & Young on the agency's process of
settling inter-bank claims owed by closed banks.
The international auditor is expected to shortly complete its
audit on some Rp 15 trillion in interbank claims on closed down
banks.
Legislators and several economists have called on the
government to exclude interbank claims from the government
blanket guarantee program due to the possible abuse.
Assets shrinking
Meanwhile, Bank Indonesia deputy governor Subarjo Joyosumarto
dismissed on Monday media reports that some of the assets of the
16 banks closed down by the government in November 1997 had
"disappeared."
Speaking to reporters after accompanying Sjahril to the
meeting with the House leaders, Subarjo said that the liquidation
team was still working on how to recover the assets of the closed
banks, estimated at Rp 13.8 trillion.
"It's not true. I don't know where the news came from," he
said, dismissing reports that the assets had "evaporated" and
Bank Indonesia should be responsible.
Subarjo said that so far the liquidation team had recovered
some Rp 2.8 trillion from the sale of assets.
He said that some Rp 11.5 trillion of the assets were in the
form of loans.
He admitted that recovering the loans was difficult because
selling the collateral amid the current weak economic condition
would only get fire-sale prices.
"Until now, the liquidation team has reported monthly,"
Subarjo added. (rei)