BI Deputy Governor Muliaman D Hadad said, his department saw the condition of the national banking system is now strong enough and get the trust of the community. This is the opportunities for banks that will begin to look the global market.

“We need not lose heart because of our banking industry is strong enough, there was even a glance at the global market,” said Muliaman said the Banking Industry Dialogue in 2010 in the Multipurpose Building Indonesian Banking Development Institute (LPPI), Jakarta, Monday (25 / 1 / 2010).

He insisted, if necessary, it would facilitate the national banking system to speak with the banking authorities of other countries in order to obtain legal umbrella to go global. Related to this, the BI will also hold talks with member countries of G-20.

“As a member of the G-20, we can speak with authority from other countries in order to dipayungi to go global,” he said.

Banking Industry Dialogue was held LPPI to facilitate a meeting between the banking industry and the regulator. Discussed here further that agenda will be made in answering the opportunities and challenges in the Indonesian banking system in 2010.

This event was also a forum for deepening the Bankers Dinner held BI on January 22, 2010. Present in this dialogue of the Board of Banking Association and all relevant directors or echelon I of the government banks, regional development banks, national private banks, banks mixed, Islamic banks, foreign banks, and people’s credit banks.

Deputy Director and Executive Director of SBI Group Pratip Chaudhuri says, than other ASEAN countries, “Indonesia is our main priority,” as quoted by the oldest English-language daily in India, The Statesman, Sunday (24/1/2010). After Indonesia, banks in Thailand and the Philippines to be the next target.

In Indonesia, SBI Group banks aimed beraset Rp 1 trillion, with a minimum number of branch offices 40 offices. Acquisition budget 200 million U.S. dollars. “Target acquisition accomplished in the second quarter of this year,” added Subramanian Sathyamurthy, Director of Operations, Treasury, and Technology SBI Indonesia, to Cash, Tuesday (26/1/2010). The plan, SBI will combine this new bank with Bank Indomonex already ruled since 2006.

Do not want to miss, Union Bank claimed the shooting of four middle-class banks in Indonesia. Told The Financial Express, Indian government-owned bank that claimed to have received approval from shareholders of the bank in Indonesia. Other Indian banks that had expressed interest to enter Indonesia is the Punjab National Bank (PNB). However, that plan has not heard the rest until now.

Not only investors from India are seriously targeting banks in Indonesia. South Korean banks, such as The Industrial Bank of Korea (IBK) and the Korea Development Bank (KDB), also have the same interests. Management both the red plates bank claims are just waiting for approval from their shareholders to run the expansion.

Although looks aggressive, move investors from India and South Korea was practically behind when compared to investors from Malaysia and Singapore who first tasted the sweetness of a bank in the country.

Director of Licensing and Banking Information BI Bank Indonesia Swastanto Joni said, until now BI has not received application for a license acquisition from Korean investors. Finally, BI has received application for a license RHB Banking Group will acquire Bank Mestika Dharma.

The aggressiveness of foreign investors are apparently triggered by the sweetness of the banking business in the country. In addition to the broad market, they are tempted by the interest margin is nearly 7 percent and the liberal ownership rules, up to 99 percent.

This is a combination of cooperation and collaboration between the BNI and the Posindo shared a money transfer service with the potential and different resources.

With this partnership, BNI money transfer services can be forwarded to the service of weselpos instant Posindo that can reach remote areas as sending money via money order.

This cooperation was marked by the signing of cooperation agreements between Subiantoro Bien, Director of Treasury & International BNI with Setyo Riyanto, Marketing Director of PT Pos Indonesia, witnessed by Parikesit Suprapto, Deputy Minister for SOEs Line of Business Banking and Financial Services; Felia Salim Deputy Director BNI; and I Ketut Mardjana, President Director of PT Pos Indonesia, in Jakarta on Monday (25.1.2010).

According to Bien, the synergy between BNI and is believed Posindo can provide added value for both parties and be able to explore a greater potential for money transfer business in the future.

“With the globalization makes no longer any boundaries between countries for people who work or run a business that takes money transfer service that is easy, fast and cheap. BNI answer these challenges by improving performance and remittances services to customers across the country, including by expanding the network through collaboration with other institutions, “said Bien

BNI Smart Remittance Service to BNI superior service, supported by a broad international network and collaboration with other institutions. BNI has 5 overseas branches in major cities of the world are London, Tokyo, Singapore, Hong Kong, New York, a subsidiary of BRL (BNI Remittance Limited) in Hong Kong which has 4 outlets, Remittance Representative in the countries of the Middle East such as Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Asia including Malaysia, Korea, Taiwan and the support of more than 1300 correspondent banks all over the world.

BNI also developed the concept of virtual offices and also collaborated with major institutions in other countries, such as with Japan Post (Genkin Kaketomei) and SingPost.

With an international network is extensive it will be more complete through collaboration with PT Pos Indonesia. So that remittances can be served by the service to reach weselpos instant on remote areas with a network of PT Pos Indonesia.

“This collaboration is also to be our commitment in supporting the Ministry in implementing the state-owned SOEs Incorporated, which is increasing synergy or mutually beneficial cooperation between the SOEs to improve the performance of SOEs in general,” he added

BNI remittance performance in 2009 both incoming and outgoing transfers rose sharply transfer. For the delivery slip the slip reaches 2.05 million or 103 percent of the target with a nominal value reached 35.6 billion U.S. dollars. This year, BNI target increased remittance transactions rose by 20 percent.

Eight banks increased their ranking by Fitch Ratings on Wednesday (27/1/2010), the Bank Mandiri, Bank Rakyat Indonesia, Bank Central Asia, Bank CIMB Niaga, Bank Danamon, Bank Internasional Indonesia, Bank NISP OCBC and UOB Bank Buana.

Earlier, on January 25th, the same institution to raise the rank of Indonesia `s debts in foreign currency, from BB to BB + with stable outlook.

“This ranking reflects the increase in endurance in the midst of the financial performance of operating conditions more difficult, especially in the first quarter of 2009,” said Director of Financial Institutions Group Fitch Ratings Tan Lai Peng in Jakarta.

He explained that the increase was ranked according to Fitch Ratings’ expectations that the improvement of banking in Indonesia will continue because the macro economic outlook is stronger in 2010.

Although ranking these banks rose, Tan admitted that the quality of loans in almost all banks in 2009 decreased. This decline is expected to continue in early 2010. However, Tan believes, operating conditions are better this year will support the credit quality and profitability in the future.

In the midst of political criticism

According to analysts of capital markets and banking, Mirza Adityaswara, Indonesia increase state rank reflects the trust of international agencies on macro economic conditions of Indonesia. In 2009, Indonesia one of the few countries in the world that have a positive economic growth, which is 4.3 percent.

This year, Mirza said, Indonesia’s economic growth could be supported by 5,3-5,7 percent with a large population, heavy reliance on exports is relatively low, a healthy banking system, as well as fiscal policy and financial authorities to be careful.

“So, in the midst of criticism against the government some politicians, turned out to agencies such as Fitch Ratings gave praise to raise the ratings of Indonesia and Indonesian banks,” said Mirza.

Related increase in the ranks of eight banks with liquidity, Mirza said, since the 2009 third quarter, is no longer a problem of liquidity in the domestic banking system.

The flow of credit in this year, according to Mirza, will depend on the demand for credit and real sector activity for bank loans that have not been distributed is still quite large.

Should, go Mirza, real sector activity in this year may be in line with the improvement of the global economy and the domestic economy. Thus, loans from banks that have not been distributed can be used by employers.

Vice President Director of Bank Mandiri l Mertayasa Wayan Agus last weekend in Denpasar, Bali said, Xl Regional Office Denpasar Bali mellputi region, NTT and NTB.

“We want to participate actively in the development of the region Central Indonesia by providing banking products and comprehensive services for people in areas not reached. In addition, we also want to develop the potential of SME sector to support regional economic development,” said Deputy Director main Mandiri I Wayan Agus Mertayasa during the inauguration of the Regional Office.

In addition to credit to SME segment, the bank also ingln strengthen the banking business in the consumer segment in the tourism sector and explore the business potential in the province of Bali is more deep and aggressive, especially related to transactional banking businesses.

Meanwhile, NTB and NTT provinces require banks to support infrastukturnya development in tourism sector development. “We also look at NTB and NTT provinces have great potential in the agricultural sector to work with the maximum,” said Wayan Agus.
Total banking assets in these three provinces during the last five years grew an average 15.1 percent per year, faster than national banks.

In 2004, total banking assets in the three provinces was Rp 29.4 trillion. As per November 2009 rose to Rp 59.2 trillion. Credit growth grew at an average 22.1 percent per year.

Total credits in these three provinces rose from Rp 13.4 trillion in 2004 to Rp 35.9 trillion in November 2009.

Meanwhile, Micro Credit, Small, and Medium Enterprises (MSMEs) are distributed in these three provinces grew an average 22.3 percent per year. Total loans increased from Rp MSME 11.5 trillion in 2004 to Rp 30.9 trillion in November 2009.

So that the funds come from outside will only be hot money, where if the conditions in the volatile country such hot money could easily go to other countries.

“What we do not have what the risk to be money coming in we absorb adopt risk. We have a system enggak. we are stagnant, the DPK all get together in big banks, in exchange transactions, we are busy in the money market, “said Capital Market Observer, Yanwar Rizki, after the polemics Trijaya FM, in Warung Daun, Cikini, Jakarta, Saturday (30 / 1 / 2010).

He stated that the Government should be able to follow the example of several countries that dare to take advantage of the flow of hot money to run the real sector.

Dicontohkannya, China which has institutions that are tasked to find the hot money, but those funds will flow in the form of subsidies to certain sectors.

“In 2010, China had been doing the tightening of liquidity, but for agriculture and rural business subsidies provided by him. As driving by the government to lower interest rates as a cost factor. Country’s estimated production costs decline for the sector absorbs the largest kindergarten, “he said

Meanwhile, in European countries the government provides tax incentives for banks to give credit to the dominant sector and the government set also providing tax incentives for companies that reinvest into This real sector. It is the Government should do to manage the flow of hot money entering the order does not come easily.

“Just pick which one? we is not no nothing, just silence. There if the index rises, it strengthened the exchange rate falls, “he concluded.

This was revealed by chief economist of Bank Mandiri Mirza Adityaswara, in the event of Securities Brokers Association Seminar Indonesia (IPEI) themed ‘Test Bank Bailout of the Century Perspective of Politics, Law, and Economics’ at the Hotel Nikko, Jalan MH Thamrin, Jakarta, Monday (1 / 2 / 2010) night.

“Inflation was recorded 0.84 per cent, but the BI rate will not be affected. It was higher than consensus estimates of Bank Mandiri own approximately 0.5 percent and year on year (yoy) was estimated at 3.5 percent, but exit 3, 75 percent, “said Mirza.

He explained, there are two main reasons why the BI Rate was not expected to rise following the increase in inflation. First, according to the inflation rate is still in the BI calculation. “Inflation was 3.75 percent within the range of BI until the end of the year,” he explained.

Second, he explained, if the cause of high inflation comes from the supply side. Namely the increase in food prices, which may occur due to lack distibusi well, and so forth.

“The cause of the supply side rather than demand side. To the solution must be of the supply side, such as improving the distribution of food, rather than raising interest rates. Raising the interest rate that can be done when it happens because of demand (demand),” he said.

For that, Mirza said, the government needs to do is fix the food distribution, which is also done by improving infrastructure. According to him, the BI rate to remain. Because the later will rise also because many countries will raise interest rates.

“We are still at the Fed Rate. Fed Rate until the end of the year can not change. Australia has raised interest rates, China has raised the minimum compulsory deposits (GWM), India also has raised GWM. We’re not in a position to loosen, but not yet to raise, “he explained.

However, he explained, if the worst scenario for the BI rate was increased by 75 basis points until the end of a 7.25 per cent from current 6.5 percent.

“It’s still in the balance of Century Bank, or now Bank of the Pearl,” said Mirza, in Seminars Indonesian Association of Securities Brokers (IPEI) themed ‘Test Bank Bailout of the Century Perspective of Politics, Law, and Economics’ at the Hotel Nikko, Jalan MH Thamrin , Jakarta, Monday (1/2/2010) evening.

He explained that currently the Bank’s record profit Pearl of Rp250 billion. Possible profit in five years could reach Rp1, 25 trillion. “The value of the book can be Rp2 trillion in five years,” he explained.

Furthermore, even if the bank is sold in five years, funds for Rp6, 7 trillion will be able to return. “BCA is now worth four times the price of the book, BTN cost twice the price of the book. Well, if Century could be sold two times book value price price Rp3 trillion, about three times so it Rp6 trillion,” he explained.

When compared with the fit, he explained that in November 2008 the value of the guarantee raised to Rp2 billion, and will have as much Rp5, out of 3 trillion and that will not be returned. In fact, he continued rating agency Fitch Rating credit rating raised Indonesia, but Greek as well as Spanish lowered.

“It’s raised Indonesia’s rating, the international recognition of the management of fiscal, monetary, and makropemerintah Indonesia. Including the financial sector in securing the IV-quarter 2008,” he said

There are interesting issues that can be used as lessons, especially for policy makers related to the case of Century Bank bailout, namely the risk of public policy in times of crisis.

In the eyes of government, Century Bank bailout policy is considered rational even if it ditomboki “state money” which swelled to Rp6, 7 trillion. By reason of systemic effects that can result in volume II of economic crisis, the government must act superfast (prompt action) even if paid for with a very expensive price. However, the view both from the parliamentary opposition and even some financial experts consider that the bailout policy is very high cost need not be done.

Besides claimed no significant impact on the national banking system, the government considered a policy that facilitates the banking corporate crime. Strong statement of former Vice President Jusuf Kalla, a former Kabareskrim Susno Duadji, and some economic and legal observers representing the claim. Regardless of the outcome of the case of Century Bank bailout, public policy taken by the government often invites the risk of controversy, especially when government is faced with the global financial crisis.

In the view of risk management expert Professor Kevin Down (2009), a global-scale financial crisis has made the government panic in all countries so that one solution is to make the bailout and nationalize the banks. Unfortunately, for the context of Century Bank, the policy has the potential bailout actually pose a risk of moral hazard.

That is, the government adopted a policy of Century Bank rescue the national economic interest, but actually there are certain interests that are hidden “benefit” certain parties. Moral hazard situation then this is what sparked the suspicion of various parties, especially the parliament, that ended with controversy.

Risk Policy

In a crisis situation like what happened in the case of Century Bank bailout, whatever the policy choices taken by the government at that time full of risk. Government caught in a dilemma situation. Do not take decisive action is confronted with the risk of economic crisis. Instead, taken decisive action means high cost and provoke controversy.

How do I get in the future of public policy does not create economic and political risks are high? There are wise suggestions made by Prof. Kevin Down (2009) related to these issues, considering the level of moral hazard. This means that if a policy of great potential for increasing moral hazard, the policy is considered bad and avoided wherever possible.

Apparently, in the context of Century Bank bailout, the government is less thorough in considering the degree of moral hazard. As a result, as we are working through the Special Committee examine Century, the government is in a position that is not profitable. Public considered that the government, particularly the Minister of Finance and Bank Indonesia, making high-risk policies, especially in law and politics. The next problem, how to minimize the risk of policy moral hazard?

By using a simple analogy of Paul Slovic (2001), high risk-taker’s behavior is more dominant factors shaped by feelings rather than rational. For example, someone decided to smoke and then addiction is more governed by feelings rather than reason. Everyone knows that cigarettes are a health hazard, but because levels feel more dominant, the decision was made to smoke.

By using the analogy Slovic, Century bailoutBank policies that swelled the cost of Rp632 billion to Rp6, 7 billion can be classified cargo policy rational factors tend to be low. Why? First, the swelling cost of the bailout to 1,000 per cent to be irrational.

Although the government argued that there is no harm whatsoever with these numbers, the decision was not preceded by consultation with the Vice President when the President was abroad. Whereas decisions such as inflammation of the bailout costs are a very strategic decision.

As the highest government officials at the time, rational is the vice president should be involved in strategic decision-making. The absence of such consultation mechanisms cause swelling policy impressed bailout costs are made in a hurry so that emotional factors are more dominant than rationality. Second, the government understanding that the funds Deposit Institution (LPS) is not considered state money is also not rational.

Whereas the provisions of state money already provided for in Article 1 No. 17 of 2003 on State Finance. According to state financial experts Baharuddin Aritonang (2009), based on these laws LPS funds into the category of state money. Thus, the search for the source of bailout funds from the LPS, including the use of state money. Consequently, the government is not necessarily easily determine the amount of the cost of the bailout without prior consultation with the relevant public officials.

Third, it is irrational to use the media short message service (SMS) to communicate the decision-making process is very important and strategic. Through a special committee meeting, the public be wondering why the handling of important cases communicated by SMS? Does not the government officials facilitated adequate communication media? Or did consider the case of Century is frivolous cases? Rational, komunikasikebijakanstrategisperlu process carried out with a reasonable mechanism and in accordance with the provisions of applicable law.

Wisdom

Public policies to deal with cases of Century Bank as the global crisis deservedly taken a lesson. First, the rationalization of public policy at the time of crisis can be achieved if the policy-making mechanism involving the relevant authorities. The claim that the government is stuck in a situation that calls for quick handling made should no longer be a reason to ignore the relevant public officials.

If that happens on the other hand, public policy will reap exactly taken a lot of criticism and the potential for allegations of corruption. The second lesson is the bureaucrats should be literate and obedient to the law. Polemics about LPS funds including state money or not really does not need to happen when bureaucrats legal literacy. Using legal consulting services are legitimate, but bureaucrats also have to know the details and consequences of the policy taken.

Therefore, compliance with the law becomes an important factor for the professional bureaucrats who made that policy do not cause a bad precedent in the future. Last but not the least, the public must continue to give an appreciation of the government who dare to take risks in addressing the global financial crisis potential systemic impact.

Economic stability is maintained until today at least is the result achieved by the Centry Bank bailout policy. What is important is the law enforcement authorities need to track the flow of bailout funds so that they can be found in the presence or absence of corruption.

“That depends, we not love deadlines. There can be fitted, there is no
can. It should be slow, “said BI Deputy Governor Budi Rochadi after the Banker’s Dinner at the House Bank Indonesia Kebon Sirih, Jakarta, Friday (22/1/2010) evening.

However, because he expresses it expensive will not force it. The reason is, it is also understand if the use of much more expensive chips. “That depends,” he added.

Still associated with the time of the turn to the chip, he said it would do so slowly.

“But expensive, so should it slowly, never at any time to completion diserahkam
association, but with what happened yesterday, you guys want to accelerate the bank replaced the chip, “he explained.

Previously, the central bank acknowledged that the use of magnetic card in the ATM card does contain many weaknesses. Therefore, will be gradually pengantian chip type card as he had done on the credit card.

“With a magnetic stripe card has a flaw, then a gradual pace to contain the chips,” said Director of Bank Supervision 3 BI, Erwin Rianto.

However, he admitted supply the chip-based cards will cost more expensive than magnetic cards. “But his run to his side because the cost is more expensive chip,” he added.

It is also agreed by the Deputy Director of the BCA Jahja Setiaatmadja, but he said that the chip cards in some countries still do not apply a lot, so take a card with two functions.

“Securing a better use of the chip. But I understand that the chip can be used enggak abroad. Like Hong Kong, Australia was still wearing magnetic. Must be a double-function card. But if it means that magnetic can walk,” he said.