MINISTER ORDERS EXPORT FINANCING INSTITUTE TO BEGIN OPERATING IN JULY

Jakarta, June 17 (ANTARA) - Finance Minister Sri Mulyani Indrawati has instructed the Indonesian Export Financing Institute (LPEI), or Exim Bank, to begin operating in July 2009.

"Based on Law No. 2/ 2009 on LPEI, the institution should have started operation in September 2009, but the minister asked that it begin its operation in July 2009," A Fuad Rachmany, head of the Capital Market Supervisory Board and Financial Institution (Bapepam-LK) said here on Wednesday.

The LPEI has been set up in order to break through the barriers of the business world, including political risks, that could not be penetrated by commercial banks, so that the matter has to be borne by the government.

He said that the LPEI was not bound to the law on banking and on insurance but it was regulated in a separate law, namely Law No. 2 / 2009.

"The LPEI is set up not intended as a competitor for commercial banks but it is expected to fill the gap which could not be filled in by commercial banks," he said.

Rachmany said that although it was no longer under the supervision of Bank Indonesia (BI/the central bank), yet LPEI remained to need the support of the central bank.

"LPEI needs the support of BI because it will remain to be active in the inter-bank money market (PUBA) although its status is no longer a bank," the Bapepam-LK chief said.

In the meantime, BI deputy governor Muliaman D Hadad said with the change in the status of Bank Expor Indonesia (BEI) into a LPEI based on Law No.2 / 2009, the BEI was no longer under the supervision of the central bank.

"This is a progressive step. We hope that with becoming a non-bank financial institution BEI would be able to carry out its vision and mission. We also hope it could pass its transitional period well," Hadad said.