LPS Calls Bank BJB Injects IDR 25 Billion To Healthy BIMJ

Rupiah (Photo: Antara)

JAKARTA - The Deposit Insurance Corporation (LPS) cooperates with Bank BJB, which is a creditor of Bank Perekonomian Rakyat Indramayu Jabar (BIMJ) to become an investor as an effort to restore BIMJ. Bank BJB will inject IDR 25 billion in capital to BIMJ.

"BIMJ's restructuring was carried out by converting loans into Additional Core Capital amounting to Rp25 billion from all BJB Bank loans to BIMJ amounting to Rp39 billion," said Member of the LPS Board of Commissioners for Guarantee Program and Bank Resolution Didik Madiyono quoting Antara.

With this conversion, the calculation of the Minimum Capital Provision Obligation (KPMM) of banks according to the Temporary Management Team reached 28.83 percent and the average cash ratio for the last three months reached 27.03 percent.

Didik said that with such a large KPMM and cash ratio, banks can meet the health level provisions regarding solvability and liquidity.

"This is a breakthrough step for more effective bank management, thus allowing LPS to carry out rescue measures by potential investors or other parties, before LPS decides on resolution options, namely purchase and assessment, bank bridge, temporary capital participation, or liquidation," he said.

As is known, BIMJ together with seven other people's economic banks (BPR) have been designated by the Financial Services Authority (OJK) as a bank in resolution on January 12, 2024.

The BPR-BPR has been given the opportunity for more than a year to improve solvency (KPMM) and/or liquidity (cash ratio).

However, until the deadline ends, the condition of solvability and/or liquidity of banks is still under the provisions regarding the level of bank health, so that OJK determines it as a bank in resolution.

Based on OJK calculations, BIMJ's capital needs to improve bank KPMM are at least IDR 25 billion.

After the bank's restructuring step, BPR Indramayu Jabar (BIMJ) has now become a normal bank that was previously included in the category of Bank Dalam Resolution (BDR).