Reimbursements for closed banks to start

Reimbursements for closed banks to start

JAKARTA (JP): All customers of the 16 liquidated banks which
have yet to recover all of their deposits and savings will be
reimbursed in full from March 6, Bank Indonesia announced
yesterday.

The government will reimburse the deposits of customers in
cash for up to Rp 75 million, while any remainder will be
provided in cash if it is less than Rp 25 million, the central
bank said.

If any remainder is equal or more than Rp 25 million, it will
be transformed into deposits at state-owned banks for a minimum
of two years with annual interest rates of 16 percent.

For foreign exchange deposits, the reimbursement will be given
in rupiah based on the exchange rate recorded on Oct. 31, 1997,
the central bank said.

The rupiah traded at 3,500 against the dollar on Oct. 31.

Reimbursements to customers with obligations to the liquidated
banks will be released only after the total obligation is taken
into account.

Bank creditors and the owners, management and group affiliates
of the liquidated banks, however, must wait for the completion of
the banks' liquidating process before they can be reimbursed.

Following the onset of Indonesia's currency crisis, the
government closed down 16 banks in early November. At that time,
the government only guaranteed up to Rp 20 million for immediate
reimbursement to depositors of the banks.

Large depositors were unable to recover funds over and beyond
the Rp 20 million guaranteed for seemingly an indefinite period
of time.

But on Feb. 20, Minister of Finance Mar'ie Muhammad announced
that President Soeharto had decided that the government would
reimburse depositors in full.

He explained that Bank Indonesia would provide bridging funds
of some Rp 3.1 trillion, which the government would repay in 10
years.

State-owned banks will handle the reimbursement process. Bank
Rakyat Indonesia will take responsibility for the customers of
Bank Kosagraha, Bank Dwipa, Bank Umum Majapahit Jaya and Bank
Anrico.

Bank Negara Indonesia will reimburse customers of Bank Harapan
Santosa, while Bank Dagang Negara will be responsible for
customers of Bank Pinaesaan and Bank Citrahasta; Bank Bumi Daya
for Sejahtera Bank Umum; Bank Ekspor Impor Indonesia for Bank
Astria and South East Asia Bank; Bank Pembangunan Indonesia for
Bank Pacific and Bank Mataram; and Bank Tabungan Negara for Bank
Industri and Bank Guna.

Customers at Bank Djakarta will have to wait until a
liquidation team is formed before they can be reimbursed. (08)