Public accountants may audit BI

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)