Indonesian Bank Restructuring Agency

Indonesian financial regulatory authority

The establishment of the Indonesian Bank Restructuring Agency (IBRA) (Indonesian: Badan Penyehatan Perbankan Nasional, BPPN), lit. "National Banking Revitalization Agency") in early 1998 was one of a series of steps taken by the Indonesian government, in agreement with the International Monetary Fund on 15 January 1998, in response to the banking and economic crisis which emerged following the onset of the Asian monetary crisis in mid-1997.^[1] Among other things, the drastic depreciation of the rupiah (Rp) reduced bank liquidity, and loss of public confidence in the rupiah and the banking system in general.

In establishing IBRA, the Indonesian authorities were effectively establishing a "bad bank" financial vehicle to allow the segregation of bad debts away from established banks with the aim of promoting the overall recovery of Indonesia's financial system.^[2]

As a measure to cope with the scarcity of liquidity in the nation's banking system, in late 1997 and early 1998 the central bank (Bank Indonesia), as a lender of the last resort, provided liquidity assistance loans to banks. In addition, the Government instituted a blanket guarantee program for all bank liabilities, to arrest further erosion of confidence towards the system. This process left the Indonesian banking system holding a large number of bad loans at the end of 1997.

History

Establishment

IBRA was established on 26 January 1998 (based on the Presidential Decree No 27 year 1998)^[3] and was planned to have lifespan of five years in order to undertake its tasks. In the event, IBRA's liquidation took longer than planned and the Agency was finally terminated on 30 April 2004. According to the decree establishing IBRA (Presidential Decree No. 27 Year 1998), IBRA's objectives were to administer the government's blanket guarantee program, and to supervise, manage and restructure distress banks. These objectives were extended on 27 February 1999 to include managing the government's assets in performing banks under restructuring status and to optimize the recovery rate of asset disposals of distressed banks. IBRA undertook a comprehensive series of activities consisting of bank liability program, bank restructuring, bank loan restructuring, shareholders settlement, and the recovery of state funds. These were carried out by the major operating units within IBRA (Bank Restructuring, Asset Management Credit, Asset Management Investment, Risk Management, and Support and Administration).

IBRA was supervised by the Ministry of Finance, the Financial Sector Policy Committee (FSPC) and the Oversight Committee. A Financial Sector Policy Committee (FSPC/Komite Kebijakan Sektor Keuangan) was formed on 21 August 1998 whose members included the main economic ministers of Indonesia, and the Independent Review Committee (IRC), which includes representatives from International Monetary Funds (IMF), the World Bank and Asian Development Bank (ADB).

Controversy

During the period of the existence of the Agency, IBRA had a troubled record.^[4] The Agency was criticized for being slow in implementing its tasks of restructuring, for lack of transparency, and for alleged irregulatories.^[5] There was also considerable controversy surrounding its operations, including the salaries of senior staff which were said to be very high.^[6] One of the most known controversy of the IBRA is the Bank Bali Scandal where Golkar Party officials colluded with the IBRA and businessman Rudy Ramli to pay an illegal commission in which part of the fund is used for B.J Habibie re-election bid.

Leadership

One main problem for the Agency was that, partly because of period of political instability that Indonesia passed through after the fall of President Suharto in May 1998, there were numerous changes in leadership (of the Ketua or the chair) of IBRA. During the six years of IBRA's operations, there were a total of seven heads of the Agency.

Heads ("Ketua") of IBRA 1998-2004

No	Name	Start	Finish	Months
1	Bambang Subianto	Jan 1998	Mar 1998	2
2	Iwan Prawiranata	Mar 1998	22 Jun 1998	3
3	Glenn S. Yusuf	22 Jun 1998	12 Jan 2000	19
4	Cacuk Sudarijanto	12 Jan 2000	6 Nov 2000	10
5	Edwin Gerungan	6 Nov 2000	25 Jun 2001	7
6	I Putu Gede Ary Suta	25 Jun 2001	19 Apr 2002	10
7	Syafruddin Arsjad Temenggung	19 Apr 2002	27 Feb 2004	22

Closure

When the Agency was finally closed at the end of April 2004,^[7] the head of Indonesia's Supreme Audit Agency, Billy Joedono was cautious about reaching conclusions about the performance of IBRA. Before submitting a report to the Indonesian Parliament, Billy Joedono noted that IBRA appeared to have done its job in restructuring the majority of troubled banks but nevertheless left further conclusions about the performance of IBRA to the Parliament.^[8]'

References

^ IMF, Statement by the Managing Director on the IMF Program with Indonesia', 15 January 1998.
^ Details of the process of bank restructuring following the Asian financial crisis in Indonesia are in Yuri Sato, 'Bank Restructuring and Financial Institution Reform in Indonesia' Archived 19 December 2016 at the Wayback Machine, The Developing Economies, XLVIII(1), March 2005, pp. 91-120.
^ Keputusan Presiden Republik Indonesia Nomor 27 Tahun 1998 (Presidential Decree No 27 of 1998).
^ Wayne Arnold, 'Indonesian Bank Agency Fading Our', International New York Times, 2 October 2003, and Reiner S., 'IBRA disappoints ahead of early closure next year' Archived 3 July 2019 at the Wayback Machine, The Jakarta Post, 27 December 2002.
^ 'IBRA to be audited soon, says Bambang', The Jakarta Post, 23 November 1999.
^ 'IBRA bashing', The Jakarta Post, 30 January 2004.
^ Presidential Decree No 15 of 2004 formally closing the Agency was signed on 27 February 2004.
^ Tony Hotland, 'IBRA did job, but success unclear, says audit agency', The Jakarta Post, 8 May 2004.

Government of Indonesia

Executive Branch

Central
Government

Elected officials	President of Indonesia list Vice President of Indonesia list
Cabinet (List) and Ministries	Coordinating Minister for Economic Affairs Coordinating Minister for Human Development and Cultural Affairs Coordinating Minister for Maritime Affairs Coordinating Minister for Political, Legal, and Security Affairs Agriculture State Apparatus Utilization and Bureaucratic Reform Communication and Information Technology Cooperatives and Small & Medium Enterprises Defense Energy and Mineral Resources Environment and Forestry Women Empowerment and Child Protection Finance Foreign Affairs Health Home Affairs Industry Investment Agrarian Affairs and Spatial Planning Law and Human Rights Manpower Maritime Affairs and Fisheries National Development Planning Public Works and People's Housing Religious Affairs Education, Culture, Research, and Technology Social Affairs State Owned Enterprises Ministry of State Secretariat Tourism and Creative Economy Trade Transportation Villages, Development of Disadvantaged Regions, and Transmigration Youth and Sports Affairs
Non-Ministerial Government Agency	Maritime Security Agency National Armed Forces National Counter Terrorism Agency National Cyber and Crypto Agency National Food Agency National Disaster Management Authority National Narcotics Board National Police National Resilience Institute National Search and Rescue Agency Public Prosecution Service State Intelligence Agency Quarantine Agency Bank Indonesia Government Goods and Services Procurement Policy Institute Finance and Development Supervisory Agency Central Agency on Statistics Indonesian Migrant Workers Protection Agency National Population and Family Planning Board Geospatial Information Agency Meteorology, Climatology, and Geophysical Agency National Agency of Drug and Food Control National Archives of Indonesia National Library of Indonesia National Research and Innovation Agency National Standardization Agency Nuclear Energy Regulatory Agency Cabinet Secretariat National Administration Institute National Civil Service Agency Radio of the Republic of Indonesia Television of the Republic of Indonesia
Non-Structural Agency	Acceleration of Housing Enforcement Acceleration of Infrastructure Provision Policy Committee Anti Dumping Committee Attorney Commission Broadcasting Commission Business Competition Supervisory Commission Central Information Commission Child Protection Commission Civil Service Advisory Agency Commission for Assessment of Analysis of Environmental Impacts Commission on Biological Safety of Genetically Engineered Products Company Privatization Committee Cooperative Council Corruption Eradication Commission Council of Engineers Council of Health Workers Counterfeited Rupiah Eradication Coordinating Board Defense Industry Policy Committee Deposit Insurance Agency Executive Office of the President Film Agency Film Censorship Institution Financing Policy Committee for Micro, Small and Medium Enterprises Financial Services Authority Financial Transaction Reports and Analysis Centre General Elections Commission General Elections Organiser Ethics Council General Elections Supervisory Agency Government Accounting Standards Committee Hajj Financial Management Agency Health Workers Disciplinary Board Hospital Oversight Agency Indonesian Academy of Sciences Institute for the Prevention and Eradication of Forest Damage Istiqlal Mosque Management Executive Board Lake Toba Authority Agency Medical Counci National Accreditation Committee National Amil Zakat Agency National Aviation Security Committee National Border Management Agency National Commission on Violence against Women National Commission on Human Rights National Committee on Sharia Economics and Finance National Consumer Protection Agency National Council for Special Economic Zones National Defense Council National Disability Commission National Energy Council National Film Advisory Agency National Health Advisory Agency National Industry Committee National Information and Communication Technology Council National Police Commission National Productivity Institute National Professional Certification Board National Social Security Board National Sports Committee of Indonesia National Team for the Acceleration of Poverty Reduction National Transportation Safety Committee National Wages Council National Water Resources Council Nuclear Energy Advisory Council Nusantara Capital City Authority Oil and Gas Downstream Regulatory Agency Ombudsman of the Republic of Indonesia Pancasila Ideology Development Agency Patent Appeal Commission Peace Maintenance Mission Coordination Team Peat and Mangrove Restoration Agency Presidential Advisory Council Press Council Public Accountants Professional Committee Public Housing Savings Committee Public Housing Savings Management Agency Regional Autonomy Advisory Council Regional Border Management Agency Social Security Administrator Special Task Force for Upstream Oil and Gas Business Activities State Civil Service Commission State Civil Service Advisory Board Titles, Decorations and Honours Council Tourism Promotion Board Trade Security Committee Trademark Appeal Commission Tripartite Cooperation Institute Waqf Agency Witness and Victim Protection Agency

Regional
Government

Legislative Branch

Central Government	People's Consultative Assembly House of Representatives List Regional Representative Council List
Regional Government	Regional House of Representatives