Indonesia to issue ‘prudential guidelines for private banking’

The nation’s central bank is currently laying out “prudential guidelines for private banking” in the form of a new BI regulation, a top official says.

Bank of Indonesia deputy governor of banking research and regulation, Muliaman Hadad, said on Wednesday that the rulings already existed, but needed to be integrated into one detailed and more stringent ruling.

“Now we are focusing more on the prudential regulations, how to run private banking services prudentially. Banks manage people’s money, so they need to be careful. Risks must be managed well, as well as internal control,” Muliaman said on the sidelines of the Indonesia Banking Expo 2011 at the Jakarta Convention Center. According to him, implementation of banking regulation and standard operating procedures were still lacking because of weak first lines of defense -- the operational staffs of banks. “BI does not meet customers on a daily basis, banks do. So the first line of defense should be the operating staffs -- tellers, marketing staffs,” Muliaman added.

The comments came amid a police probe into alleged embezzlement by a relationship manager of Citibank’s Citigold wealth management services, Inong Malinda alias Malinda Dee, suspected of embezzling at least Rp 16 billion or US1.87 million of clients’ funds.

The full story is available at thejakartapost.com.

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Tags: private banking, guidelines, embezzlement