Implication of Liquidation Method to Recovery Rate and Residual Asset: The Case of Rural Banks in Indonesia
| Main Authors: | Ashari, Hasan; Perbanas Institute, Nugrahanti, Trinandari P.; Perbanas Institute |
|---|---|
| Format: | Article info application/pdf eJournal |
| Bahasa: | eng |
| Terbitan: |
Indonesia Student Assocation, Universiti Kebangsaan Malaysia Bangi, Selangor, Malaysia
, 2017
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| Subjects: | |
| Online Access: |
http://www.kemalapublisher.com/index.php/ppi-ukm/article/view/290 http://www.kemalapublisher.com/index.php/ppi-ukm/article/view/290/pdf_124 http://www.kemalapublisher.com/index.php/ppi-ukm/article/downloadSuppFile/290/10 |
Daftar Isi:
- Bank liquidation is one method of bank resolution conducted by resolution authority. The bank's resolution occurs when the authority establishes a bank declared/tends to fail and there is no private sector intervention that can restore the bank's ability in a short time for normal procedures. This study aims to explain the application of liquidation on rural banks liquidated by Deposit Insurance Corporation. Indonesia (IDIC) as well as its implications for recovery rate and residual assets resulting from the liquidation process. The methodology in this research is qualitative and the nature of this research is descriptive analysis. The authors used two different types of sources. First, direct observations to IDIC office. Second, Semi-structured interviews were conducted with the chairman of liquidation team of rural banks, the official of IDIC and Auditors who engage audit on or attestation on the liquidated bank, which time informal interviews were conducted, and documents were also collected. Based on the result of this research, it is concluded that with the implementation of liquidation method, there are critical issues that require IDIC attention, such as the fraud rate that occurred before the bank was liquidated, time of submission of problem banks from Bank Supervisory Authority (BSA) to IDIC, and decrease of asset quality and flow of documentation and information of failed bank, personnel readiness, supervision, handling of liquidation assets and limitations of liquidation guidelines. The critical problem faced above will ultimately affect the recovery rate and residual assets after the liquidation process ends.