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)