http://www.thejakartaglobe.com/home/boediono-blasts-banks-for-false-bank-indonesia-reports/372029
April 28, 2010 Ardian Wibisono Vice President Boediono. (Antara File Photo) Boediono Blasts Banks for False Bank Indonesia Reports Vice President Boediono, the object of relentless attacks over the Bank Century bailout, has taken banks to task for not providing credible and accurate information about themselves in the monthly reports they are required to send to the central bank. Speaking at the opening of the annual conference of the Indonesia Banks Association (Perbanas), Boediono said accurate information was crucial for preventing crises and formulating effective policy when crises do develop. Bank Indonesia governor at the time of the Century bailout in late 2008, Boediono is keenly aware of the importance of having good information. He came under months of fierce attack for his role in deciding to bailout the bank with some critics claiming the decision was taken without sufficient data to back it up. Every month Indonesian banks are required to submit information to Bank Indonesia, including key financial metrics such as their amount of outstanding loans, their total assets and their capital adequacy ratio. Banks should keep an eye on each other and Bank Indonesia should penalize lenders who submit false reports, Boediono said. "Our banking industry structure is already good but it can still be improved, especially regarding the reliability of information. Bank reports have to be accurate," he said. "Information is the main basis on which to make decisions. Banks should watch out for each other and Bank Indonesia should set conditions to make sure the reports are accurate and sent in on time. If necessary there should be penalties," Boediono added. The central bank has long been criticized as weak and ineffective in supervising banks. Bank Indonesia deputy governor Budi Rochadi on Wednesday told the Jakarta Globe that some banks did send in inaccurate reports. "Most of the banks that do it are small-sized lenders," he said, adding that the reason banks might submit false data was to avoid being placed under Bank Indonesia supervision. Since January, BI had improved its system for collecting reports from banks, Budi said. "Previously, it took more one and a half months to get all of the figures from a bank but now it takes less than a month and the information is more accurate." Budi said the central bank already fined banks who were found to have supplied false data but was considering making these penalties tougher. However, he declined to say what the penalties were. "There's a calculation but I don't remember it," he said. Perbanas chairman Sigit Pramono said some banks were falsifying their reports, but he claimed that none of the banks who belonged to Perbanas did this. Out of the 121 banks in Indonesia, 78 are Perbanas members. Submitting false reports should be treated as a criminal act, Sigit said. [Non-text portions of this message have been removed]
