LPS to Inject Fresh Capital Into Bank Mutiara

Jakarta (Antara) - The state owned Deposit Insurance Agency (LPS) has agreed to inject fresh capital into Bank Mutiara to meet the banking regulation on Internal Capital Adequacy Assessment Process (ICAAP). Bank Mutiara is a new name of the scandal hit Bank Century, which is still mired in a legal case over controversial bail out implicating a number of people in high place such as Vice President Boediono, who was former Governor of the Indonesian Central Bank that provided the bail out. The process of capital injection is expected to be wrapped up not later than Monday next week, LPS secretary Samsu Adi Nugroho said here on Friday. The capital injection is needed to comply with a new regulation of Bank Indonesia no 14/18/PBI/2012 that requires banks to meet a certain minimum capital, Samsu said giving no figure. Under the regulation all banks operating in the country are required to meet ICAAP, which are not the same in the amount. "Bank Mutiara, therefore, has to comply with the regulation with capital adequacy ratio (CAR) of at least 14 percent," he said. He said the fund for the capital injection for Bank Mutiara is not derived from state budget. "The additional capital by LPS came from bank premiums with the principle of industry helps industry," he said. LPS earns income as premiums from its service of providing insurance for deposits. Deputy chairman of LPS Rudy Siregar said the capital injection by LPS is in line with the regulation and it is a right step to give business certainty . "The additional capital is expected to give a positive signal to the business world," Rudy added. He said LPS has been established to protect and guarantee stability of the financial system . He also said he hoped that the House of Representatives would be pro-active in supporting financial business players, especially banks by endorsing the Law on Financial Sector Safeguard Networks(JPSK). (*)