A

number of banks were grilled by members of the House of Representatives on Wednesday due to the alleged lack of protection they afforded to their customers.

During a hearing held between the House'€™s Commission XI overseeing finance and banking, Bank Indonesia (BI) and representatives of Bank Mega, Bank Jabar Banten, Bank Mestika Dharma, Bank Danamon and Bank Permata, several legislators said the banks had not done enough to protect their customers.

Commenting on cases faced by the banks, Melchias Marcus Mekeng from the Golkar Party faction said they must make sure their employees lived up to the banks'€™ ethics.

'€œWhat can be done to protect people'€™s money? Are corporate governance practices enough to do that?'€ he said.

The banks were summoned by the House to discuss current and past cases, some of which involved both their employees and customers. Bank Mega has been entangled in criminal and civil cases since 2011 with state-owned oil and gas company PT Elnusa and the Batu Bara regency administration in North Sumatra over Elnusa'€™s and the regency'€™s missing funds.

The funds, amounting to Rp 191 billion (US$19.16 million), were kept in Mega'€™s time deposits.

Several people, including ex-employees of Mega and Elnusa, have been sentenced to prison for their involvement in fraud. However, the civil case is still ongoing and is now at the Supreme Court. Elnusa and Batu Bara regency demanded that the bank return the missing funds.

Ecky Awal Mucharam, lawmaker with the Prosperous Justice Party (PKS) faction, said even though the Supreme Court had not delivered its ruling, Mega must carry out efforts to convince the public of its banking safety.

Mega president director Kostaman Thayib responded by saying that it had established an escrow account at BI as requested by the central bank.

'€œAs much as Rp 111 billion for Elnusa and Rp 80 billion for Batu Bara regency administration are now safe at BI. However, BI'€™s approval is required to disburse the funds and the approval is now pending the Supreme Court'€™s ruling,'€ he said.

Golkar lawmakers Harry Azhar Azis and Ade Komarudin insisted that Mega was also held responsible for the missing funds since one of the perpetrators worked at the bank at the time, saying that the culprit '€œpassed the bank'€™s selection process and acted within its operational scope.'€

They also questioned BI'€™s role in solving the issue. BI deputy governor Halim Alamsyah said BI had offered to mediate a settlement between the parties, but it seemed that each party tended to solve this through legal procedures.

Since the Mega-Elnusa case emerged, the central bank had introduced a new standard operating procedure that prevented customers from keeping their funds outside their domicile, as in the Mega-
Elnusa case, Halim added.

'€œAccording to a BI regulation, banks must repay their customers'€™ losses if their employees are involved in a case. However, Mega-Elnusa is rather difficult because it implicated both companies'€™ staff and we have not had a regulation for that,'€ he added.

Maruarar Sirait, lawmaker of the Indonesian Democratic Party of Struggle (PDI-P), urged the central bank to issue more regulations to prevent similar cases from happening, while waiting for a new banking law that would contain more thorough customer protection coverage.

At the hearing, lawmakers also grilled Bank Danamon over one of its customers'€™ missing funds. The
Rp 43.9 million was allegedly stolen via the bank'€™s phone banking services using a customer personal
identification number (PIN).

According to Danamon compliance director Fransiska Oei, the bank had explained to the related customer regarding the safety aspects of the PIN and had held discussions with the client, but no
resolution had been achieved.