Bank Indonesia's Dutch unit struggles to erase bad image

Rendi Akhmad Witular, The Jakarta Post, Amsterdam

Indover Bank, a specialized wholesale bank in the Netherlands that is fully owned by Bank Indonesia, has long been regarded as a European outpost of Indonesia's rampant corruption.

The alleged laundering of illicit funds belonging to former president Soeharto and massive debts owed by Indonesian politicians and central bank officials are just some of the cases that hit the headlines in recent years.

But efforts are now being made to improve things, thanks to a new commitment from the central bank and the government to reap maximum (legitimate) benefit from Indover, and to prevent the frequent scandals of the past from reoccurring.

With BI now in the process of transferring the ownership of the bank to the government, the central bank is trying hard to convince the government that Indover is worth saving.

The transfer of ownership is required under the Central Bank Law, which bans BI from owning subsidiaries, and should be completed by 2009 at the latest.

With new management in position, the Amsterdam-based Indover is now in the process of getting back to its original business as a provider of trade finance for Indonesian exporters.

"A better financial performance is obviously needed. We plan to do this by changing our orientation to focus once more on providing support for Indonesian exporters. That is actually our main objective," Indover managing director Chairy Hakim told The Jakarta Post on Friday.

Chairy explained that getting the business back on the right track was sorely needed to rid the bank of its bad reputation..