Banking expo opens with calls for further reforms, BI supervision

Padang Indonesia Banking Expo 2011 officially kicked off on Wednesday, with bankers, including Bank Indonesia (BI) Governor Darmin Nasution, making comments on the recent emergence of several alarming cases involving banks.

"We have to admit there are things we did not focus on properly. We are talking about risk management, which includes operational risks. We should [also] focus [on this].

“It seems we need to pay closer attention to banking [standard operating procedures], human resources, etc.," Darmin said in his opening address for the three-day exposition at Jakarta Convention Center.

The expo features 69 participants comprising BI, 23 banks and 45 debtors or banking partners that will showcase various products from banking to textiles and footwear.

Dozens of bankers from Indonesia’s banking giants are also scheduled to speak on strategic banking issues.

"Of course, the first line of defense in such issues is the internal controls at each bank. Then comes public accountant as the second line of defense. The third line will be BI, which supervises banks," Darmin said.

The central bank would thus hold more dialogues on how to fix these issues, Darmin said.

"We need to maintain a balance. [We shouldn’t] get so enthusiastic about innovating with new products and advancing marketing strategies that we forget to protect our customers."

National Banking Association (Perbanas) chairman Sigit Pramono also urged banks to "sit together to find solutions to issues instead of blaming each other for mistakes".

"Considering the sensitivity of the banking industry, which is different to other industries, we urge banks to trust [each other] and support BI in tackling banking issues because, by law, BI is the agency that supervises banks.

“As for criminal cases, we should let police enforce the law," Sigit said.

The comments come amid a police investigation of Citibank and Bank Mega after the alleged embezzlement of client funds and death of a credit card holder, allegedly in the presence of bank debt collectors.[TJP]


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