Shareholders of state-owned Bank Mandiri on Monday (29 September) approved the bank's plan to grant Rp2,000bn (US$238m) debt retrenchment, mostly to debtors in the small- and medium-sized enterprises (SMEs) sector, in a bid to help improve the recovery of troubled loans and save the debtors businesses.
The retrenchment facility (known as a haircut) will be applied to debtors whose loans have been written off by the bank. As of June this year Mandiri had written off Rp20 trillion (US$2.38bn) worth of bad loans.
The decision to grant the retrenchment facility was made at an extraordinary shareholders meeting, which also retained E.C.W Neloe as president of the country's largest bank in terms of assets.
President commissioner of Mandiri Binhadi said that the retrenchment could help the bank recover some part of its bad loans and at the same time help the debtors to keep their businesses alive so that they could repay their debts later.
