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Indonesia's LPS completed 10 bank resolutions last year
The Deposit Insurance Corporation (LPS) completed resolutions of 10 rural banks by the end of last year, a top official has said.
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Deposit Insurance Corporation (LPS) chairman Halim Alamsyah delivers an opening speech at the Challenges to Global Economy seminar in Jakarta on Sept. 22. (Photos courtesy of JP/Arief Suhardiman)
The Deposit Insurance Corporation (LPS) completed resolutions of 10 rural banks by the end of last year, a top official has said.
In the previous year, only three bank resolutions were completed due to a rising trend of bad loans.
The resolutions came after the Financial Services Authority (OJK) revoked operational licenses for the 10 rural banks, LPS executive director for claim and bank resolution Ferdinan D. Purba said on Thursday.
From 2005, when it was established, to last year, the LPS completed 75 bank resolutions including the controversial bailout of Bank Century, which became the former Bank Mutiara and then Bank J-Trust after it was acquired by Japanese financial company J Trust Co.
Ferdinan said the agency had paid claims worth Rp 168.5 billion (US$12.69 million) for more than 36,000 accounts in the 10 liquidated banks last year.
“On the other hand, there are 2,033 accounts considered not eligible for claim payments because the customers were implicated in bad loans, while 16 accounts could not be paid because of high rates given above the LPS’ guaranteed rate,” he said on Thursday.
The LPS does not guarantee banks’ savings accounts and time deposits if their interest rates are above its guaranteed rate, which is now maintained at 6.25 percent in commercial banks and 8.75 percent in rural banks for rupiah-denominated accounts.
Eight of the 10 liquidated banks last year were conventional lenders, while the remaining two were sharia-based ones. (bbn)
