he Financial Services Authority (OJK) has banned state-owned lender Bank Tabungan Negara (BTN) from opening new bank accounts at its cash offices in the wake of an investigation into a time deposit slip forgery case that allegedly involves its employees.
The prohibition is implemented on all types of accounts.
The authority is also banning BTN offices from seeking third-party funds from marketing efforts and opening new branches, OJK deputy commissioner for banking supervision Irwan Lubis said on Tuesday, as quoted by Kontan.co.id.
"These measures will last until the bank's internal control gets better and its operational risks decrease," he said, expressing hope that the lender could improve its good corporate governance.
(Read also: Jokowi calls on Cabinet to protect Indonesian consumers)
BTN corporate secretary Eko Waluyo ensured his firm would comply with the prevailing regulations.
"BTN will not protect anyone involved in the fraud case," he said.
Four institutions and an individual customer reportedly fell victim in the fraud case, which carries Rp 258 billion (US$19.3 million) in potential losses.
Police have arrested the head of the BTN Cikeas cash office in West Java, Bambang Suparno, on account of his alleged involvement in the case. (prm/hwa)
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