Tuesday, September 27, 2005

Krisna Wijaya to lead bank super agency

Krisna Wijaya, a commissioner at PT Bank Rakyat Indonesia (BRI), had been appointed executive chairman of the newly established Lembaga Penjaminan Simpanan (Deposits Insurance Agency), a FDIC-like agency, replacing the old blanket guarantee scheme that cost the state of US$70 billion in banking bailout since 1997.
His long time boss at BRI, Rudjito, will also his boss at the super agency as Chairman of Commissioner Council.
The agency has started its operation last week with initial capital of Rp4 trillion (around US$400 million), amount that is just too small to cover all the third party funds in Indonesian banking system at around US$100 billion.
LPS is established according to the Law No. 24/2004 in which banks should pay deposits insurance premium of 0.2% of its third party funds every year. Krisna, in his last article, said LPS is vunerable with so limited capital in its hands.
Krisna lost the race to be deputy governor of Bank Indonesia (Central Bank) to Siti Ch Fadjriyah few months ago, but it seems he get ‘better deal’. Krisna was seen in various meeting with people close to president Susilo Bambang Yudhoyono (SBY). Some economists believe he is SBY guy.
Krisna also a productive analyst with weekly articles and comments in various newspapers and magazines, mainly on banking topic. He is the author of REFORMASI PERBANKAN NASIONAL: Catatan kolom demi kolom, a book published in 2000.
In the last few months, he actively urged government to ammend the law on investment and put the foreign-owned national banks like PT Bank Central Asia (BCA), BII, Danamon, Permata, Lippo, or Niaga into the category of foreign-owned banks that should be excluded of guarantee scheme.
He also expressed his fears that LPS would not be able to handle a significant bank collapse with only US$400 million capital. This is because of total coverage in the next six months and will only cover maximum Rp100 million (US$10,000) per depositor per bank by March 2007.
Born in 1950, Krisna graduated from Bogor Institute of Agriculture (IPB) in 1980 and got his master degree from Gajahmada University,Yogyakarta in 1990. He was appointed director of BRI in 2000 in charge of microbanking and technology.
Technology almost killed Krisna’s career. In May, Supreme Audit Agency reported to State-Owned Ministry that it found irregularities and indication of corruption at IT expenses of US$100 million at BRI. No clear follow-up of the criminal case and government even installed Krisna as commissioner at the bank and now as chief executive of a super agency for the banks. Well, this is Indonesia!

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September 27, 2005 3:17 PM  

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