The government may launch an investigation into the case of Bank IFI, which was liquidated last week, after banning its top management executives and a shareholder from flying out of Indonesia.
“From the governance side, if there is misconduct, there will be an investigation by the Deposit Insurance Corporation (LPS), in cooperation with the (National) Police,” Finance Minister Sri Mulyani Indrawati said Monday.
The immigration office has imposed a travel ban on five people including Bambang Rachmadi (a shareholder), Bambang Arianto (IFI president director) and Agus Suyanto (director of compliance).
IFI’s operating license was revoked by the central bank last week after the bank’s CAR (Capital Adequacy Ratio) dropped below 8 percent due to a sharp rise in non-performing loans (NPLs) to 24 percent, far above the 5 percent allowed.
The bank had been under BI supervision since September.
Analysts said small lenders like IFI were usually owned by business groups. These kind of lenders tend to have a small number of depositors, and can easily collapse if depositors withdraw a large amount of money.
IFI is owned by Bambang, the president director of PT Ramako Gerbang Mas, which helps run the McDonalds’s fast food chain here.
Mulyani said the government, through LPS, had seized all the assets and collaterals of IFI.
“I expect LPS and Bank Indonesia (BI) to deal with this (case) thoroughly so there will not be any missing assets, or accounting outside of the bank.”
She added that LPS would soon try to return to clients all deposits under Rp 2 billion (US$180,000).
The government does not guarantee deposits above Rp 2 billion.
Of IFI’s Rp 355.8 billion in third-party funds, Rp 191.2 billion were in the form of savings and deposits above Rp 2 billion that are not covered by the LPS guarantee.
So, only Rp 164.6 billion of total funds are to be returned to depositors, under the provisions of the guarantee scheme, according to BI.
IFI customers said they were asked to go back to the bank on April 27 to seek clarification on how to get their money back.
They said IFI staff told them that either Bank Negara Indonesia (BNI) or Bank Rakyat Indonesia (BRI) would be appointed by the government to return their money. LPS’ executive head Firdaus Djaelani was not available for further comments.
LPS said in a statement last week that it would verify all depositors funds within a maximum of 90 days after April 17, urging depositors not to worry about their money.
To avoid such cases from happening again and reducing confidence in the banking sector, BI has asked banks to raise their capital provision to cushion the extra risks resulting from the global financial crisis.
Muliaman Hadad, a director at Bank Indonesia in charge of the banking sector, said last week that there were no more banks currently under BI supervision, suggesting that another bank liquidation is not so likely in the near future.
Mulyani said BI would also supervise banks to conduct good governance to anticipate any problems in the banking sector, which might undermine the whole sector and economy, as happened in the 1997 Asian financial crisis.
“It is expected banks’ capital should not decrease, so as to affect their performance,” she said.
How IFI depositors can recover their funds:
• LPS will appoint certain banks to help depositors to get their money back.
• Depositors are asked to provide legal documents to substantiate their deposit, along with proof of identity such as ID card or driver’s license.
• LPS will announce the timing of payments.
Source: BI, LPS
