IMF alarmed over banking scandal, urges resolution
IMF alarmed over banking scandal, urges resolution
JAKARTA (JP): The International Monetary Fund on Friday
expressed great concern over the Bank Bali scandal, urging the
authorities to act quickly and firmly to resolve the matter.
"The IMF is extremely concerned about recent reports alleging
irregularities in a transaction involving IBRA, Bank Indonesia
and a private bank," an IMF spokesman said in a statement from
Washington.
The IMF said the decision by IBRA to launch a speedy
investigation into the transaction and to publish its findings is
absolutely necessary to bring the matter to a close.
The multilateral agency, which arranged a US$43 billion
bailout program for Indonesia in November, 1997, urged the
investigations to be concluded in a matter of days.
"We do fully support the appointment of an international
auditing firm to validate the findings of the investigations.
Anything short of this, will further damage domestic and
international investor confidence," the spokesman added.
The IMF, he added, will continue to work with the relevant
authorities to deal rapidly and rigorously with the matter.
In Jakarta, Bank Indonesia's Governor Sjahril Sabirin promised
on Friday to announce preliminary results of investigations into
the Bank Bali scandal sometime next week.
"We are investigating what has really happened," Sjahril told
reporters.
Sjahril said investigations into the bank accounts will be
completed next week but it would take more time to know the final
results of the whole investigations.
Separately, the Center for Banking Crisis, a private banking
watch organization, said it had filed a lawsuit at the State
Administrative Court in Jakarta demanding that Presidential
Decree No.26/1998 on the government guarantee on bank deposits
and claims be revoked.
Deni Daruri, chairman of the center, said the presidential
decree, though enacted in a bid to cope with the banking crisis,
violated the article of the 1945 Constitution which stipulates
that state finances shall be governed by law.
The decree was issued by then President Soeharto in late
January, 1998, amid massive runs on domestic banks.
He added the blanket guarantee had been abused by unscrupulous
bankers and officials, causing huge losses to the state.
Daruri said even if such a guarantee was really necessary to
protect depositors, it should have been based on a government
regulation in lieu of law, meaning that the ruling required an
approval of the House of Representatives a few weeks after its
promulgation. (vin)