Thu, 04 Aug 1994

It's high time now for banks to sacrifice: Bank director

JAKARTA (JP): The banking industry should willingly sacrifice to help small and medium scale companies in a bid to establish equal business opportunities, says an executive of Bank Danamon.

"Unbalanced growth between big and small companies will undermine the economy and will threaten the banking industry," Yusuf Arbianto, the bank's managing director, said yesterday.

Speaking at a seminar on banking ethics, Yusuf said that the banking industry, as an agent of the development, should not only think of profits but also of social equity.

"The failure in creating equal business opportunities among small and bigger businesses will boomerang on the banking industry itself," he said. "It is, therefore, high time that the banking industry turn to small and medium companies."

Banks have been widely criticized for their lack of support for the country's small and medium companies, which are often associated to companies owned by indigenous entrepreneurs.

The banks often fail to meet the mandatory lending level of at least 20 percent of their outstanding loans to small businesses due to their preference for large corporations or conglomerates. This is often branded as the main cause of the widening financial gap between the "haves and have nots".

If all banks preferred big clients, the gap between big and small companies will widen further, he said.


Yusuf explained that the banking industry should also support environmental issues because the future of the banking industry will also be determined by its care for the environment.

"The banking industry will earn the public's trust only if it cares for both people and the environment," he said, adding that profits will no longer be determined by the high lending rates they charge but also their concern for people.

"By being close to the public, a bank will have more clients and that means more returns," he said.

Speakers at the opening of the two-day seminar included Soeharsono Sagir, a senior lecturer of University of Padjadjaran, Bandung, West Java.

Soeharsono focused his deliberation on the legal aspects of the banking industry, including the new banking law and the central bank's prudent rulings.

He said that business ethics in the banking industry is no longer in question as long as bankers and bank staff follow the existing regulations.

I Nyoman Moena, a patron of Perbanas and Christianto Wibisono, a noted economic analyst, will speak on the same theme today. (hen)