Land agency to help banks recover bad loans
Land agency to help banks recover bad loans
JAKARTA (JP): State Minister for Agrarian Affairs Soni Harsono
pledged here yesterday that he would help commercial banks
recover non-performing loans in which land was used as
collateral.
"So far there are a lot of cases of bad loans in which debtors
are using their land as collateral. However, the land has legal
flaws in their certificates," Soni, who is also chairman of the
National Land Agency (BPN), told reporters here yesterday.
His announcement came after he attended a meeting of economic
ministers.
President Soeharto said last Thursday that the Ministry of
Justice, the Office of the Attorney General, the National Land
Agency, the State Receivership Agency and monetary authorities
should cooperate to seek fair and swift ways to legally settle
non-performing loan cases faced by the banking industry.
According to Bank Indonesia (the central bank), bad debts from
both state and private banks had reached some 3.5 percent of the
outstanding loans as of last November, amounting to some Rp 145.9
trillion (US$57.7 billion.)
Soni said yesterday that BPN and the central bank had already
met several times to discuss ways to solve the problems related
to bad loans.
Ready
"We are now ready to help commercial banking," he said. He
added that his agency is now taking measures to help the
liquidation team of the now defunct Bank Summa recover the bank's
bad loans.
He said that many plots of land which were put up for mortgage
at Bank Summa were also put up at other banks as collateral.
Soni's statement is expected to relieve executives of private
banks, which are encountering an increasing level of non-
performing loans.
Perbanas has been committed to helping its members cope with
non-performing loans through its newly established consultative
team. The association's vice chairman, Thomas Sujatno, criticized
the government, which so far has helped only state-owned banks in
recovering bad loans.
"The government is very successful in executing bad loans at
state-owned banks," he said. However, he added that private banks
should actually be receiving similar attention.
Perbanas' chairman said over the weekend that the
association's new team, comprising lawyers and experts in banking
and economics, will cooperate with all related government
agencies to help settle problem loans faced by private commercial
banks.
These agencies will include the Ministry of Justice, the
Office of the Attorney General, the State Receivership Agency,
Bank Indonesia and BPN.(icn)