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Bandung DPRD Questions Rp70 Billion Loss at Regional Bank, Demands Full Audit
🇮🇩 Indonesia /Economy & Trade

Bandung DPRD Questions Rp70 Billion Loss at Regional Bank, Demands Full Audit

From CNN Indonesia · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • The Bandung City Regional People's Representative Council (DPRD) is scrutinizing a plan to increase capital for BPR Kota Bandung, a regional public bank.
  • The bank has accumulated losses of approximately Rp70 billion, raising concerns about its financial performance and internal management.
  • DPRD members emphasize that injecting more public funds requires a thorough internal evaluation to identify the root causes of the losses before any new capital is allocated.

The Bandung City Regional People's Representative Council (DPRD) has raised serious concerns over a proposal to inject more capital into the regional public bank, BPR Kota Bandung. The bank has reportedly accumulated losses totaling around Rp70 billion, prompting a critical review by the DPRD's Special Committee (Pansus) 18.

Erick Darmadjaya, a member of Pansus 18, questioned the repeated injections of capital without clear signs of internal improvement. He stressed the necessity of a deep evaluation to understand the persistent financial struggles. "I am surprised that BPR Kota Bandung has received additional capital several times but still incurs losses. We need to see what is actually happening within the company," Darmadjaya stated.

I am surprised that BPR Kota Bandung has received additional capital several times but still incurs losses. We need to see what is actually happening within the company.

— Erick DarmadjayaMember of Pansus 18 DPRD Kota Bandung, commenting on the bank's persistent losses despite previous capital injections.

The DPRD insists that new capital alone is not a solution. They advocate for identifying the fundamental reasons behind the losses before deciding on future policies, especially since the funds originate from the regional budget, which represents public money. The council highlighted findings from comparative studies showing that well-performing regional banks generally receive capital injections when they are already healthy, unlike BPR Kota Bandung's situation.

Legislators pointed to three main issues: high non-performing loans, weak adherence to prudent principles, and potential non-compliance with regulations. They also requested consideration of findings from the Financial Services Authority (OJK). The DPRD is pushing for internal reforms, including operational efficiency, improved governance, and resolution of problematic loans, to ensure new funds address core issues rather than just covering operational deficits. The council also warned the city government to learn from other regions, citing the liquidation of a BPR in Cirebon due to prolonged financial crisis. However, the current discussions in Pansus 18 are focused on comprehensive evaluation and regulatory refinement, not immediate closure or liquidation of BPR Kota Bandung.

Additional capital is not the main solution. The most important thing is to fix the internal.

— UnknownLegislative statement emphasizing the need for internal reforms over financial bailouts.
DistantNews Editorial

Originally published by CNN Indonesia in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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