Update legislation on banking urgent

JAKARTA (JP): Legal mechanisms related to the economy are urgently needed to fight banking crimes, police said yesterday.

So far there is not a single law in Indonesia that explicitly defines banking crimes, National Police Chief Gen. Banurusman Astrosemitro said in a prepared paper which was presented by an aide during a seminar held jointly by the School of Criminology of the University of Indonesia and the Police Science Academy.

"Police face difficulties in discovering modern banking crimes such as those involving automatic teller machines, credit cards and telebanking, since Indonesian legislation has not anticipated such banking developments," Banurusman said.

The one-day seminar was held on the theme Portrait of Contemporary Economic Crimes in Finance and Banking.

Banurusman, whose paper was read by his expert staff, Maj. Gen. Hadiman, said that the investigation of such crimes was very complicated since they could take place anywhere and at any time.

"Indonesian laws only concern crimes related to forgery, embezzlement and cheating. We do not have any law concerning crimes that are related to credit cards or the use of computers in crime," Banurusman said.

"If such phenomena are not anticipated early, it is possible that Indonesia will become a target and source for such crimes," Banurusman said.

Central bank data show that, as of June this year, 240 banks with 6,254 offices and total assets of about Rp 346,886 billion were operating in Indonesia.

Laws

According to Banurusman the lack of laws related with banking crimes was due to the lengthy legislative procedures.

Banurusman also noted that generally crimes against banks are concealed by the victimized banks since their executives are afraid to have their cases made public.

"On the other hand, police cannot investigate if there is no report from the victim bank, he said.

Meanwhile, economist I Nyoman Moena said that the root of banking crimes was the mentality of the bankers. He said most Indonesian bankers still thought of banks as trading enterprises.

"They run banks on the basis of speculation, as in a trading operation: How to get biggest profit in the shortest possible time," Moena said.

Such speculation, he said, was dangerous since banks are long- term businesses.

As an example he said that almost all cases of bank bankruptcies during the 1960s and 1970s were caused by such phenomena. (01)