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Tuesday, January 27, 1998 Published at 04:13 GMT



Business

Indonesia moves to help troubled banks
image: [ Many of Indonesia's 200 banks have accumulated massive debts ]
Many of Indonesia's 200 banks have accumulated massive debts

The Indonesian Government says it will support the country's troubled private banks and guarantee their obligations are met.

The Finance Minister Mar'ie Muhammad said decisive government action was required to reassure the public.

He announced the setting up of the Indonesian Bank Restructuring Agency, which will have the power to take charge of any private bank if it gets into financial difficulties.

Many of Indonesia's 200 banks have accumulated massive debts following the recent regional economic crisis, which has shrunk the value of the currency, the rupiah.

Mr Muhammad said in a statement: "The government has decided that from it will stand behind the commercial banks of the country and guarantee that obligations to depositors and creditors will be met.

"Should any bank encounter difficulty in making payments, Bank Indonesia, acting on behalf of the government, will immediately step in to make sure that these payments can be made.

"This means that the public can now rest assured - their bank deposits are now completely safe and sound."

The announcement is the latest move by the government to follow through on commitments to the IMF for sweeping economic reforms in return for a $43bn bail-out package.


 





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