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)