New bank loan repayment plan to be unveiled
New bank loan repayment plan to be unveiled
JAKARTA (JP): The government is to unveil a new format on
Tuesday for the repayment of Bank Indonesia liquidity support
injected to troubled banks since January.
Indonesian Bank Restructuring Agency chairman Glenn S. Yusuf
said on Monday that the loan repayment system might be discussed
first with IMF Asia Pacific director Hubert Neiss prior to the
announcement.
Neiss is scheduled to arrive in Jakarta on Tuesday to conduct
a regular monthly review of the country's economic reform
program.
Glenn was speaking to reporters following a meeting with
several economic ministers. He declined to give further details.
The government injected more than Rp 141 trillion (about
US$16.5 billion) in liquidity support to help banks meet massive
withdrawals from panicked depositors in the wake of plunging
confidence in the industry.
President B.J. Habibie demanded on Oct. 1 that bank owners
repay the loans in one year in cash, despite a September
agreement in which bank owners could give IBRA their fixed assets
as the repayment for their debts.
The Salim Group, owner of Bank BCA, the country's largest
private bank, the Gajah Tunggal Group, owner of Bank BDNI, and
Sudwikatmono, controlling shareholder of Bank Surya, pledged to
surrender a large chunk of their assets in 120 companies as the
repayment of their debts worth Rp 79.9 trillion on Sept. 21, the
original deadline for the repayment.
Owners of 11 other indebted banks, including those owned by
timber tycoon Mohamad "Bob" Hasan, who co-owned Bank Umum
Nasional (BUN), and property mogul Usman Admadjaja who controlled
Bank Danamon, failed to meet the Sept. 21 deadline.
The government has closed down 26 banks since last November,
including Bank BUN and BDNI, and nationalized four others
including BCA and Danamon, in an effort to restructure the
country's ailing banking sector.
The government was forced to change the repayment format
following an Oct. 18 letter from Neiss to Habibie demanding
"flexibility" in the repayment system because a "fire sale" of
the assets in the current depressed economic situation would
result in lower than justified prices. The letter was leaked to
the Asian Wall Street Journal.
Sources said that the new repayment format would allow the
bank owners to pay in cash a certain percentage of the loans in
one year, and the remainder would be paid according to a schedule
by selling the assets over the following years.
They said that the bankers might be given five years to repay
the loans in full. (rei)