Bankers are monitoring closely the political moves triggered by the Bank Century Rp 6.67 trillion bailout case, while at the same time fearing some possible loss of customer confidence in the banking sector, an association says.
Sigit Pramono, chairman of the Indonesian Banks Association (Perbanas), expressed on Monday fear over the political fallout of the bailout, saying that bankers had started worrying about wider negative impacts on bank customers’ confidence if these political rows drag on and potentially spin out of control.
“Bankers are now taking a deep breath. They are currently in ‘wait and see’ mode, but at the same time, expecting a big hit over the case,” he told a discussion.
Indonesian bankers are now hoping that they can shift the focus away from the case as soon as possible, as “otherwise bank customers would lose confidence,” Sigit said.
“This case has been dragging on, not only due to the legal efforts into the case, but also the political agendas of the legislators,” he said, adding that political interference might prolong the inquiries and result in it taking longer to reach conclusions and settle the case.
Sigit said early indications of the decline in customers’ confidence had already been felt as customers have begun questioning whether the current inquiry into the Century case could cause a wider negative impact on the industry.
“One of the biggest threats is that now parties are trying to [investigate and] reveal the flows of the bailout funds. Where the money has gone may involve so many banks. To find it all out, the PPATK [Financial Transaction Analysis and Report Center], or other parties, will need to investigate [many] bank accounts,” Sigit explained.
Eventually, such efforts might jeopardize the confidentiality and privacy of many honest bank customers if their data is leaked to the public. “Please, don’t let a problem in one particular bank devastate the whole banking industry,” Sigit said.
Because, he went on, customer confidentiality played a key role in the banking business. This could affect the way depositors or investors might perceive doing business with Indonesian banks, given the Bank Century inquiry.
“I am not against legislators or other authorities getting information on financial transactions in connection with the Century case. But, please, be careful. Keep the data confidential,” Sigit said.
Deni Danuri, a banking observer who also attended the discussion, said that the negative impact of the Century case would depend on how fast and transparent the investigation into case would be.
“The case has rolled on and must go on no matter what. Century, now Bank Mutiara, must be helped to raise its value because state funds worth Rp 6.76 trillion have already been disbursed,” Deni said.
In the same forum, Sigit also stated that national banks current lending performance were not so good with too little lending in progress.
“As much as Rp 276 trillion of approved credits have yet to be disbursed since the creditors are still using their current capital capacity,” he said.
Industries are not now working on full capacity, Sigit said, as the economy had yet to fully recover. “So this is not only about our interest rate anymore,” he said. (bbs)
