JAKARTA LIFE'S STYLE

Bank Indonesia (BI) Governor Darmin Nasution said he would act firmly against bank executives who did not respect deals with or orders given by the central bank.

"The board members concerned will be summoned and ordered to undergo a fit and proper test again. The punishment could be that he or she would not be considered to have passed the test," he said here on Friday.

He said BI would impose the sanction if bankers broke the agreements or rules issued by the central bank, including the agreement on limits of deposit interest rates in big banks.

He said the imposition of harsh measures would also be carried out against those violating rules on the minimum reserve requirement (GWM) which are linked to the loan-to-deposit ratio which had been set at between 78 and 100 percent.

Although under the regulation Bank Indonesia will impose a penalty in the form of a higher GWM for those failing to meet the 78-100 percent LDR range, sanctions would still be given to the bank directors concerned.

"The penalty is for the banks while the board members who are not loyal will also be given a sanction. We are now still formulating the regulation for it but it will be implemented immediately," he said.

He said Bank Indonesia had the right to summon sitting bank board members again to undergo a fit and proper test and also to declare those who fail the test as unfit for their posts.

Under existing rules, people nominated for bank directorships or commissionerships have to pass a fit and proper test before they can actually serve in those positions.(.antaranews)

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