Troubled Bank Putera put under IBRA management

Troubled Bank Putera put under IBRA management

JAKARTA (JP): Bank Indonesia put the management of Bank Putera
Multikarsa under the Indonesian Bank Restructuring Agency (IBRA)
on Saturday after the bank's owners failed to raise the funds to
settle the bank's negative account at the central bank.

IBRA said in a statement the move was immediately followed by
the appointment of a new management team for the bank.

"On Dec. 11, 1999, IBRA received PT Bank Putera Multikarsa
from the governor of Bank Indonesia," the agency said, but adding
that the move was not a takeover but simply a contingency measure
to allow the bank to solve its temporary liquidity crunch.

IBRA said the new management team consisted of people
appointed by the agency and several members from the previous
management team.

The agency said the transfer of the bank was in accordance
with the government's blanket guarantee program on deposits.

Bank Putera's clearing activities were suspended by the
central bank on Dec. 7 after it suffered a negative balance with
Bank Indonesia amounting to Rp 278.5 billion following a run on
the bank.

The run amounted to Rp 592.3 billion, drying up the bank's
reserves at the central bank and putting its account in Bank
Indonesia in negative territory.

The run on the bank was prompted by a report on the Internet
that the bank would be taken over by IBRA in the wake of the
revelation of 'politically-directed loans' for Bank Putera's
parent company, the Texmaco Group.

All banks operating in Indonesia must have a deposit account,
also known as a reserve requirement, at the central bank in the
amount of 5 percent of total third party rupiah funds the bank
receives.

For third party funds in a foreign currency, each bank must
maintain a reserve requirement of 3.5 percent at the central
bank.

IBRA said that before being allowed to resume its clearing
activities, Bank Putera would be audited by Bank Indonesia and
the agency.

The agency said Bank Putera would continue normal operations,
although its clearing activities would remain suspended until the
completion of the audit.

IBRA said depositors could make transactions at Bank Putera,
including withdrawing their money from the bank, beginning on
Dec. 15.

"On Tuesday and Wednesday the management team will work on the
verification process, which is expected to be completed in two
days," IBRA said.

"Depositors don't have to rush to get their money because all
deposits are fully guaranteed by the government," the agency
added.

The government launched the blanket guarantee program early
last year amid plunging confidence in the country's banking
sector. Under the program, the government guarantees all deposits
at closed banks.

Bank Indonesia's Governor Sjahril Sabirin asserted earlier on
Friday that Bank Putera suffered only a temporary liquidity
crisis due to the massive deposit run and the bank remained in
the Category A or the group of banks with capital adequacy ratio
of more than 4 percent.

"As soon as the bank resolves its liquidity crunch it will be
released from IBRA direct supervision and management," Sjahril
told reporters.

Texmaco

Bank Putera's parent company, textile and engineering giant
Texmaco Group, was hit by a controversy after State Minister of
Investment and the Empowerment of State Enterprises Laksamana
Sukardi revealed late last month that the group received loans
totaling US$754.1 million and Rp 1.9 trillion through the
personal intervention of former president Soeharto.

The bulk of the funds came from state Bank Negara Indonesia
(BNI).

The government later disclosed that Texmaco owed a total of Rp
15.9 trillion ($2.2 billion at the current rate) in over due
loans to Bank BNI and the other three state banks-- Bank Rakyat
Indonesia, Bank Mandiri and Bank Tabungan Negara-- as well as to
IBRA.

Separately, President Abdurrahman Wahid said on Friday that
while the due process of law should proceed against Texmaco
owners, both bank BNI and Texmaco businesses should be helped to
continue normal operations.

"We should separate the owners from their businesses.
Entrepreneurs suspected of violating the law should be prosecuted
but their business entities should be allowed to continue
operations, otherwise hundreds of thousands of workers will be
thrown out of their jobs," the President said.

On the other hand, Bank BNI, which employs tens of thousands
workers, should also be protected from bankruptcy, Abdurrahman
said, adding "this is what I call a win-win solution."

"Texmaco should settle its debts to BNI, and I am glad to
learn that they have so far made two debt installments," the
President said, pointing out Texmaco's capability to export
textile and garments, machinery and trucks.

Earlier last week, Finance Minister Bambang Sudibyo said the
four state banks and IBRA had set up a lenders club to work out a
restructuring package for the debts.

Bambang assured, however, that the loans were adequately
secured because Texmaco's total assets were estimated at Rp 23.25
trillion, meaning that the group's loan-to-asset ratio was 68.7
percent. (rei/vin)