Settlement of Indover Bank Problem

With reference to the freezing of N.V. De Indonesische Overzeese Bank (Indover Bank) operational activities by the court in the Netherlands on October 6, 2008 and the transfer of its management to the curator appointed by the court, the latest developments related to this case can be described as follows:

1. Bank Indonesia has conducted several negotiations with the curator regarding to the time given for Bank Indonesia to support Indover Bank to avoid forced liquidation. The curator has set up a deadline for Bank Indonesia of October 31, 2008.
2. Bank Indonesia has explored various possible efforts to save Indover Bank in compliance with Law No. 23 of 1999 as amended by Law No. 3 of 2004 concerning Bank Indonesia.
3. However, after several discussions and inputs from various parties, finally Bank Indonesia cannot perform any bailout for Indover Bank due to failure in obtaining approval from the House of Representatives (DPR RI) during the hearing period that ended on October 30, 2008 as stated in Law No. 33 of 1999 that has been revised to Law No. 3 of 2004 concerning Bank Indonesia.

Consequently, further settlement processes of Indover Bank will be performed by the curator appointed by the court in the Netherlands as requested by De Nederlandsche Bank (DNB).

In conclusion, Bank Indonesia would like to make the following statements:

1. Bank Indonesia will coordinate with the Government to mitigate any possible impacts on the Indonesia banking system arising from the decision taken regarding to Indover Bank.
2. Bank Indonesia will continuously support and work in collaboration with the curator in expediting the settlement process of Indover Bank in accordance to the prevailing provisions.

Jakarta, October 31, 2008
Office of The Governor

Dyah N.K. Makhijani
Director