Hubert Neiss told he and Habibie had discussed food security, rehabilitation of the banking sector and the credit overhang in the Indonesian corporate sector during a 90-minute meeting.

Neiss said it was now time to implement the many plans formulated to rehabilitate the Indonesian banking sector. "This is not an easy subject to deal with, ailing banks, and it is also politically difficult," Neiss said. "But the president has given his full support to do whatever is necessary to bring the banking system back to health and to end the support of Bank Indonesia through credit expansion to those banks," he said without elaborating.

The Indonesian Bank Restructuring Agency (IBRA) said last week the bank restructuring process was making strong progress and the next step would be the sale of six banks under IBRAmanagement as well as asset sales or securitisation of seven further banks whose assets have been frozen. Six troubled banks which were forced to turn to IBRA for huge liquidity support were taken under the agency's management in April.