New firm to manage ailing banks' assets
New firm to manage ailing banks' assets
JAKARTA (JP): The government plans to establish a new company
to manage the assets of ailing and suspended banks, Minister of
Finance Fuad Bawazier said.
The company, which will be under the supervision of the
Indonesian Bank Restructuring Agency (IBRA), will handle the
assets, including bad loans, of both private and state commercial
banks, Fuad told reporters Monday.
Fuad did not say when the company would be incorporated.
One of the first tasks of the new company, if and when it is
established, will be to handle the assets of seven banks whose
operational licenses were suspended by IBRA on Saturday.
The seven -- Centris Bank, Deka Bank, Hokindo Bank, Bank
Kredit Asia, Bank Pelita, Bank Subentra and publicly listed Bank
Surya -- were deemed insolvent in spite of massive injections of
liquidity credits from Bank Indonesia.
Besides the seven, IBRA also took over the management of six
private banks -- Bank Danamon, Bank Dagang Nasional Indonesia,
Bank Umum Nasional, Bank Tiara Asia, Modern Bank and Bank PDFCI
-- and of state Bank Ekspor-Impor Indonesia. These seven had also
received massive liquidity credits from the central bank.
IBRA is also closely monitoring the performance 40 other banks
at the recommendation of Bank Indonesia.
Fuad renewed government assurances that it would continue to
guarantee the safety of all rupiah and foreign currency deposits
in the 14 banks.
He said the government would also soon set up a company to
manage a deposit insurance scheme.
"With this policy, depositors will feel secure because they'll
know that their money is insured," said Fuad after attending an
Economic and Monetary Resilience Council meeting, chaired by
President Soeharto, at Bina Graha presidential office.
Bank Indonesia Governor Sjahril Sabirin said separately that
the monetary authorities had not set a deadline of how soon the
40 banks currently under IBRA supervision should recover.
"Obviously, the sooner the better," Sjahril said as reported
by Antara.
Fuad said it was too early to discuss what sanctions awaited
the owners of the seven suspended banks.
These, he said, must await the result of "due diligence"
performed on the seven banks. (prb/emb)