In 1998, Indonesia’s banking sector was undercapitalized, under regulated, and suffering from an excess of nonperforming loans (NPLs). In response, the Indonesian government devised the Indonesian Bank Restructuring Agency (IBRA) and its Asset Management Unit/Asset Management of Credits (AMU/AMC) as part of a three-pronged government emergency plan, along with a blanket guarantee of the debts of all domestic banks and a framework for corporate restructuring. The AMU/AMC acquired and managed nonperforming loans from a variety of Indonesian banks and attempted to dispose of them. The AMU/AMC had acquired nearly IDR 400 trillion (approximately $86 billion) in face value of loans by April 2003. Throughout its history, the organization encountered political interference, transfer issues, documentation problems, and problems with legal authority that impeded its effective operation. Although the AMU/AMC was wound down on its initially scheduled end date of February 27, 2004, its functions and many unresolved legal cases were simply shifted to a new asset management company under the Ministry of Finance.
Smith, Ariel and Nunn, Sharon M.
"Indonesia: IBRA’s Asset Management Unit/ Asset Management of Credits,"
The Journal of Financial Crises: Vol. 3
Iss. 2, 381-409.
Available at: https://elischolar.library.yale.edu/journal-of-financial-crises/vol3/iss2/20
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