IBRA to resume payment of interbank claims
IBRA to resume payment of interbank claims
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
plans to immediately resume payment of interbank claims on closed
down banks that were suspended at the beginning of the Bank Bali
scandal late in July, according to IBRA chairman Glenn S. Yusuf.
Glenn said on Tuesday that resuming the payment of the
interbank claims was one of the short-term priorities of IBRA.
"If we don't continue the payment, the government's
credibility will be questioned," he told reporters following a
meeting with senior economic ministers.
He said that the agency was currently discussing this issue
with the central bank.
The government has to pay the interbank claims on closed down
banks because they are part of the government blanket guarantee
program launched in January 1998.
The government has closed down some 50 banks since the blanket
guarantee program was introduced. But so far it has not paid any
interbank claims on closed down banks, except in the case of Bank
Bali, which ended in scandal.
The Bank Bali scandal revolves around the transfer of Rp 546
billion in commission fees from the bank to private firm PT Era
Giat Prima (EGP) for its services in helping the bank recoup Rp
904 billion in interbank claims on a closed down bank.
But IBRA has said Bank Bali should have not used the service
of EGP because the interbank claims were guaranteed by the
government.
PricewaterhouseCoopers said in its audit report into the
scandal that there were numerous indicators of fraud, corruption
and noncompliance during the processing and payment of Bank Bali
claims.
Several senior government officials, including a deputy
chairman at IBRA and businessmen close to former president B.J.
Habibie, are believed to have been involved in the scandal.
Since the outbreak of the scandal the government has suspended
payment of all interbank claims.
IBRA has assigned international auditor Ernst & Young to audit
Rp 15 trillion in interbank claims made by 10 banks on closed
down banks, to determine whether the claims are eligible under
the government blanket guarantee scheme.
The Ernst & Young audit is expected to be completed by the
middle of this month.
Banks have urged the government to immediately resume payment
of the interbank claims because this would help the tight
liquidity strain plaguing the industry.
Glenn also said another top priority for IBRA was to push
ahead with the restructuring of bank nonperforming loans, which
have slowed down following the Bank Bali scandal.
"This is very urgent," he said
IBRA is currently in control of over Rp 200 trillion of bank
nonperforming loans. The agency has previously said that it's
focusing on how to deal with 20 of the largest bad debtors.
There has been increasing concern that the agency is dragging
its feet in restructuring the loans and is vulnerable to pressure
from well-connected debtors.
Critics have demanded the agency be fully transparent in
dealing with this restructuring process to help prevent the
reoccurrence of a Bank Bali-style scandal.
Glenn also said the government was set to immediately
recapitalize the publicly listed Bank Niaga.
He said that the total recapitalization cost of the bank was
Rp 8.9 trillion.
"We are now only waiting for the government ruling to be
issued on the recapitalization of Bank Niaga," Glenn said. (rei)