Bank Indonesia liquidity assistance

 


BLBI, your history is now the BLBI task force

The establishment of the BLBI Task Force by the government, as well as listening to its recent actions through the mass media, such as watching "Life of Pi". Just recovered from a prolonged coma. More questions than answers, which prompted me to share the memories that still exist. Better now, than very late.

BLBI affairs are related to IBRA. The institution tasked with dealing with the 1998 banking systemic crisis took over the central bank's claim rights to national banks (ex BLBI), with payments in the form of government bonds. A decisive scheme sanctioned by the IMF, among other important steps.

In 2004, IBRA was dissolved, and all of its rights and obligations were transferred to the Minister of Finance, including BLBI affairs. Some BLBI affairs can be resolved at IBRA, and others are managed by the Minister of Finance. Even though they are handled by different institutions, basically the scheme for handling BLBI affairs remains the same and there should be a continuous common thread, so that the efforts of the BLBI Task Force become more meaningful.

BLBI

As collection rights against banks, BLBI recovery can be settled from the sale of bank assets, through payments by bank shareholders, and/or collection of bank collection rights against bank debtors. The scheme is clear and scalable, and all necessary legal infrastructure and mechanisms are in place.

One of the efforts for commercial recovery of BLBI funds at IBRA is through the Shareholder Obligation Settlement (PKPS) program. At that time, it was suspected that violations of banking law were very rampant, so that the shareholders of the BLBI receiving bank were half forced to join the PKPS program to bear all/part of the BLBI's obligations, with the lure that the violation of the law would be set aside and a certificate of payment was issued. BLBI payments by bank shareholders are made in cash and/or transfer of assets.

In the early stages, many bank shareholders were willing to participate in the PKPS program. Only a small number refused. Those who refuse to join PKPS are labeled "uncooperative". During the more than five years of existence of IBRA, there have been seven leadership changes, which are always followed by changes in attitudes and ways of handling PKPS, resulting in legal uncertainty. The bank's shareholders who were originally enthusiastic about joining PKPS became confused and "stagnated in cooperation".

Presidential Instruction Number 8 of 2002

The legal uncertainty is detrimental to all parties. Not only PKPS affairs, but almost all affairs at IBRA are affected by this. Therefore, at the end of 2002, the government issued Presidential Instruction (Inpres) Number 8 of 2002. This Presidential Instruction was specifically issued for handling BLBI affairs through the PKPS program by IBRA. However, the legal politics and the underlying mood are still very relevant to the current handling of BLBI affairs by the BLBI Task Force, especially as a common thread that needs to be replayed firmly and clearly.

Simply put, Presidential Instruction 8/2002 stipulates that cooperative bank shareholders in the context of PKPS must be given legal certainty. Meanwhile, those who are not cooperative will be subject to legal action. Cooperative or uncooperative benchmarks are proof of settlement issued by IBRA. In other words, bank shareholders who do not participate in PKPS or participate in PKPS but do not obtain proof of settlement from IBRA are “uncooperative obligors” and must be subject to legal action.

This last part should be continued as a common thread in the handling of BLBI affairs by the BLBI Task Force, so that there is different treatment between cooperative obligors and uncooperative obligors. There is no longer a commercial settlement opportunity for uncooperative obligors, because after IBRA disbanded, the opportunity was closed.

All that remains for the uncooperative obligor is legal action. Without the difference in treatment between cooperative and uncooperative obligors, including the unnecessary effort to formulate new criteria on cooperative and uncooperative differently from Inpres 8/2002, it is feared that legal uncertainty will continue.

Legal Action Options

Furthermore, what legal actions can the BLBI Task Force take concerning BLBI affairs and uncooperative obligors? During the IBRA period, two task forces functioned to formulate legal grounds/arguments for providing legal certainty to cooperative obligors and legal action mechanisms against uncooperative obligors within the PKPS framework, namely the KKSK Legal Aid Steering Team and the IBRA Legal Aid Team.

The BLBI Task Force only needs to study the results of the studies and recommendations from the two task forces, the documents of which are stored at the Ministry of Finance office. Be sure to read the section on “non-cooperative obligors”, as this is the status of all ex-IBRA BLBI obligors  not obtain proof of completion from IBRA through the PKPS program, and which happened to be being handled by the BLBI Task Force.

Considering that there should no longer be commercial/out-of-court settlements, it is necessary to synchronize legal actions taken by law enforcement officials in the executive and judicial circles nationally, so that there are no gaps or inequalities in actions, procedures, and final results. This synchronization is not an intervention in the judicial function, because the aims, objectives, and spirit are in line: legal action for uncooperative ex-IBRA obligors.

Crisis Cost

Until now, we still don't dare to admit that the costs of the crisis are real and real. Whether it's the costs incurred due to the 1998 monetary crisis, whether due to the 2008 banking crisis, or later the costs of the crisis due to the ongoing COVID-19 pandemic.

Please note that the Rp110 trillion BLBI funds handled by the BLBI Task Force were only partially, approximately 20%, of the total funds that had been disbursed or obligations that were still borne by the government, in the context of financing the 1998 monetary crisis through IBRA. It is necessary to create a roadmap for the settlement of these non-BLBI obligations, so that the public understands that the total cost of the 1998 monetary crisis (including BLBI) was Rp600 trillion.

Source: Taufik Mappaenre

The author is an advocate, former deputy chairman of BPPN

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