Public accountants may audit BI

JAKARTA (JP): Minister of Finance Bambang Subianto gave the preliminary nod on Friday to allowing public accountants to audit Bank Indonesia in the effort to create a more transparent banking system.

He cautioned, however, that an audit of the central bank would have to be conducted based on standards compatible with international accounting principles.

"The government agrees on the suggestions by the Golkar and United Development factions which called for a public audit of the central bank," Bambang told a working session with House Commission VIII for state budget and finance.

They deliberated a bill on amendments to the Banking Act No.7. 1992.

Proposed amendments include full independence from political intervention for the central bank in executing its monetary policy and banking supervision.

Analysts have often blamed the present banking crisis on heavy political interference in Bank Indonesia.

Bambang said the country's battered banking sector urgently needed a huge capital injection to strengthen its capital base, a need that financially distressed domestic investors were unlikely to meet.

He said this accounted for the proposed amendment for the removal of restrictions on bank ownership by foreign investors, allowing them controlling ownership of local banks.

Foreigners are currently allowed to own 49 percent of domestic banks.

Speaking to reporters after the session, Bambang dismissed news reports that the government had appointed Bank Ekspor Impor Indonesia (Bank Exim) as the surviving bank of the four state banks to be merged later this month.

"No, we have not decided yet. The decision (on which bank to become the surviving bank) will be announced by the latest on Sept. 21."

The government and the International Monetary Fund (IMF) set Sept. 30 as the deadline for the completion of legal requirements for merging the banks.

The government announced last month that Bank Ekspor Impor Indonesia (Exim), Bank Pembangunan Indonesia (Bapindo), Bank Bumi Daya (BBD) and Bank Dagang Negara (BDN) were to be merged.

Bambang added that the banks were now under due diligence and the consolidation process.

"The due diligence will be completed before Sept. 21," he said. (aly)