Tony Hotland, Jakarta – Highly troubled debtors that misused emergency liquidity support from Bank Indonesia during the 1998 regional financial crisis should be barred from new borrowing, a discussion here heard Tuesday.

Denny Kailimang, the chairman of the Indonesian Bar Association, which hosted the talks, said such debtors, who are believed to be unofficially running new banks, should not be allowed to apply for new loans.

"Those corrupters... should never be allowed to engage in credit applications or run banks. The central bank, as the key regulator, should be alert and firm over this," he said.

A number of troubled bankers who allegedly stole hundreds of trillions of rupiah from the Bank Indonesia liquidity assistance, and later fled the country to avoid prosecution, have been allowed to return to Indonesia, on the condition they pay back the lost funds.

Others who remain overseas, or those affiliated with them, are suspected of being behind new banks or financial consortiums without being officially listed.

The chairman of the Association of Young Indonesian Businessmen, Sandiaga Uno, said allowing these debtors to apply for and receive loans would be particularly unfair to small and medium businesses that might otherwise receive this money.

Small and medium enterprises, he said, account for 90 percent of businesses in the country and were significantly unaffected by the 1998 financial crisis.

"Many of these big-time debtors had their financial obligations reduced, while small businessmen were forced to pay their obligations in full," said Sandiaga.

The director of compliance at Bank Mega, Suwartini, said each bank had its own procedures for approving credit requests. However, he said banks were not allowed to accept credit requests from anyone who had been blacklisted by the central bank.

"I wouldn't say they should never be allowed again to apply for credits if they're already off the list. Each bank has its own scoring and evaluation process for processing credit requests," she said.

Vice President Jusuf Kalla has said that banks should be more aggressive in disbursing loans to help the country's real sector, which has not experienced significant growth since the economic crisis.

Kalla also said troubled debtors should be given the chance to receive new banks loans.