Residents angered by illegal banks

Residents angered by illegal banks

PALU, Central Sulawesi: Illegal banks operating under the
guise of loan cooperatives in Banggai regency have angered local
residents, Antara reported on Saturday.

The news agency said at least seven illegal banks had expanded
their operations to remote villages in the regency.

They give unlimited loans, but with interest rates of up to
120 percent per month, the news agency reported. It added that
the banks' management obliged customers to pay daily installments
on their loans, and those who failed to make their payments
risked having their valuables confiscated.

Antara said a debtor had electronic goods worth Rp 3 million
(US$428) confiscated for failing to pay Rp 300,000 he owed to one
of the illegal banks. Some residents have even been forced to
surrender their land certificates to the illegal banks.

Provincial police chief Col. Soeroso said the police had not
taken measures against the illegal banks because there had been
no official complaints.

Thousands of customers of three illegal banks rallied for days
to demand the local government take action against the management
of the banks, which fled with Rp 20 billion of their money. (04)