National banks formulating banking blue print

"The blue print is not an overnight product but we have been discussing it intensively as a form of our responsibility as the nation`s sons in the banking field," Sigit said.
Jakarta (ANTARA News) - The Indonesian National Bank Association (Perbanas) has formulated a blue print designed as a reference for the operations of banks in Indonesia.

Perbanas Chairman Sigit Pramono told a press conference here on Monday that the blue print was the fruit of Perbanas thoughts and was formulated based on the observation of the Indonesian banking condition over the past one year.

"The blue print is not an overnight product but we have been discussing it intensively as a form of our responsibility as the nation`s sons in the banking field," Sigit said.

He said that the blue print was expected to serve as a reference for all banking stakeholders to develop more structured and directed banking sector.

"We need to stress here that Perbanas has no pretension or obligation to produce a banking blue print. What we have done is expected to encourage Bank Indonesia (the central bank), financial service authority and other bankers to formulate a common blue print," he said.

Sigit said that the blue print which was produced by Perbanas in principle formulated by taking into account the banking interest and the interest of the banking balance. The principle of interest was manifested in the acronym "BAEK" meaning useful for the people, efficient, effective, strong and healthy.

The principle of balance meanwhile is manifested in the principle that major and minor banks must be given similar attention, both domestic and foreign banks operating in the country.

The blue print will further be discussed by the 18th Perbanas Congress 2012 on October 31 - November 1, 2012.

In the meantime, bank owners have been believed to be the biggest culprits causing the failure of banking business in the country, the Deposit Insurance Agency (LPS) said.

No banks have collapsed for failure in competition, LPS Commissioner C. Heru Budiargo said here on Wednesday.

Therefore, strict and firm disciplinary control by the regulator is still needed to prevent frauds, Heru said.

"In our observation in the past seven years after LPS came on line all bank scandals have been traced back to frauds," he said.

However, there are much fewer cases of banking failure at present compared with a decade earlier, he said.

LPS has been given control of Bank Mutiara, formerly known as Bank Century, which is in the center of high profile controversy involving high ranking government officials.

In the wake of the 2009 global financial crisis, Bank Century was robbed by its owners who fled abroad and the government triggered the controversy by bailing out the lender with Rp6.7 trillion.

The Bank Century case is now being investigated by the Corruption Eradication Commission.(*)

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