RI asks for pledged aid

RI asks for pledged aid

SEOUL (Dow Jones): The Indonesia government has recently called on six South Korean banks to provide, in stages, a total of $116 million in standby credit agreed upon between 1995 and 1997, local bank sources said yesterday.

The local banks, however, facing their own liquidity troubles, have been reluctant to extend aid.

The six Korean banks include state-run Korea Development Bank, Korea Exchange Bank, Shinhan Bank, The Industrial Bank of Korea, Hanil bank and the Commercial Bank of Korea, according to the sources.

The $116 million is part of $4 billion backup credit agreement the Indonesian government agreed to with 40 international banks of the U.S., Europe and Asia between 1990-1997, according to the sources.

"The Indonesian government is asking for the money, but Korean banks are asking for more time because they are also short of dollars," a source at a local bank said. "In the long run, however, local banks will have to supply the funds according to the agreements."