Jakarta, CNBC Indonesia – Towards the end of 2024, the number of bankrupt People’s Economy Banks (BPR) has exceeded 20. The current number of fallen BPRs surpasses the average number of banks that fall every year according to the Deposit Insurance Corporation (LPS), which is around 6 to 7 BPRs falling.
In July, the Financial Services Authority (OJK) did mention in August that the number of closed BPRs had almost reached 20, throughout this year. Executive Head of Banking Supervision OJK Dian Ediana Rae said that the high number of BPR closures indicates no shock at all.
“The closure of BPRs can be a good indication, I think, of how the system works in Indonesia. This means that actually the BPRs that we have now, which are almost 20 that we closed, did not cause any shock or unrest in the community at all,” concluded Dian in a webinar by the Indonesian Banking Development Institute (LPPI), Friday (26/7/2024).
Dian, who is a member of the Deposit Insurance Corporation (LPS) ex-officio, said that the institution can quickly respond to the fall of BPRs in various places. Therefore, the public’s deposits are safe, and issues can be resolved quickly.
“And this is a very strong confidence, so that in the future the community will not hesitate to deposit in commercial banks or BPRs that are under our increasingly better supervision over time,” he said.
Fraud mode by BPR executives
Executive Director of Legal Affairs at LPS Ary Zulfikar revealed three “loopholes” for fraudsters in BPRs. The first is the hierarchical supervision that is not implemented in related BPRs, and is exploited by irresponsible parties.
Ary revealed that not only shareholders commit fraud, but also directors and employees.
“So there is authority that he [the employee] has and no supervision,” Ary said at the LPS Morning Talks at the LPS Office on Tuesday (17/12/2024).
In this case, he mentioned that information technology (IT) is important for managing good governance. Because with IT systems, fake credit requests can be automatically rejected.
“So maybe the use of IT technology in BPRs is also important so that at least their governance is good,” Ary concluded.
Often, fraud is carried out between potential debtors collaborating with directors who have the authority to provide credit. Then, the potential debtor easily receives credit without going through assessment or evaluation. Then there is a kickback in credit or illegal payments to the bank officials.
“And even worse, fictitious credits. The project really doesn’t exist and is created and that is usually done collectively. Starting from directors, employees, and even the investment committee,” explained Ary.
There is also a mode of “dummy” credits where shareholders or bank executives use their ID cards to create fictitious credit.
“So it seems like the debtor borrowed the credit. Well, because it’s a dummy, the debtor doesn’t know. But some people know they borrowed and received a fee, that’s also included,” said Ary.
The third mode is taking deposits without the knowledge of the account holder.
“So depositors have deposited money into the bank but unauthorized withdrawals are made. This can happen because maybe everything is done manually and there is no supervision,” Ary explained.
List of fallen BPRs throughout 2024
1. BPR Wijaya Kusuma
2. BPRS Mojo Artho Kota Mojokerto (Perseroda)
3. BPR Usaha Madani Karya Mulia
4. BPR Pasar Bhakti Sidoarjo
5. BPR Purworejo
6. BPR EDC Cash
7. BPR Aceh Utara
8. BPR Sembilan Mutiara
9. BPR Bali Artha Anugrah
10. BPRS Saka Dana Mulia
11. BPR Dananta
12. BPR Bank Jepara Artha
13. BPR Lubuk Raya Mandiri
14. BPR Sumber Artha Waru Agung
15. BPR Nature Primadana Capital
16. BPRS Kota Juang (Perseroda)
17. BPR Duta Niaga
18. BPR Pakan Rabaa
19. BPR Kencana
20.
