State only rescue 40% of bad loans

State only rescue 40% of bad loans

JAKARTA (JP): The state receivership agency, BUPLN, has only
recovered about Rp 1 trillion from state-owned banks' bad loans
in the last two years, or 40 percent of its original target, a
senior agency official said yesterday.

"We have been working hard but the results have not been that
satisfactory," BUPLN chairman Adolf Warouw said in Medan
yesterday.

After installing two new members at a local agency office, he
said that the state banks' bad loans handled by his office
continue to increase.

BUPLN is in charge of settling and recovering bad loans
written off by state-owned banks and other state financial
institutions. The government agency recovers the unpaid loans
either through payment from borrowers or by liquidating the
collateral pledged by the borrowers.

Warouw said that the state receivership agency has thus far
received at least 98,000 cases of bad loans from state-owned
banks.

He refused to unveil the value of the bad loans handled by the
agency but said that the value increases every year.

Bad (totally unpaid) loans in state-owned banks dropped to Rp
6.38 trillion as of April this year from Rp 6.39 trillion last
December.

State banks -- comprised of Bank Rakyat Indonesia, Bank Negara
Indonesia 1946, Bank Tabungan Negara, Bank Dagang Negara, Bank
Ekspor Impor Indonesia, Bank Pembangunan Indonesia (Bapindo) and
Bank Bumi Daya -- were reported to have removed Rp 4.2 trillion
in bad loans from their balance sheets.

Warouw said that his office handles only a fraction of the bad
loans written off by state-owned banks as others are settled by
the banks' internal divisions. (hen)