(FORTUNE Magazine) – The most powerful man in Indonesia these days is a baby-faced banker at the helm of an obscure government agency. If that seems odd, consider this: Glenn Yusuf, the 43-year-old chairman of the Indonesian Bank Restructuring Agency (IBRA), is collecting tens of billions of dollars owed to the government by bank owners whose institutions have effectively gone bust. Because the debts are so staggering, Yusuf is taking assets--everything from cement factories to plantations--as compensation. He then plans to shut down some and sell off others. When he finishes his negotiations with the biggest bank owners on Sept. 21, IBRA looks set to become Indonesia's largest conglomerate. That makes Yusuf its most powerful CEO.

Yusuf will not comment on the specifics of the sensitive ongoing negotiations to recapture billions in bad debt that were accrued during Suharto's regime. But he will say that Indonesia's bank owners, who include Suharto friends as well as a gaggle of Suharto kin, were for years secretly funneling the savings of ordinary Indonesians into huge loans for themselves. "The size of the funds being used by these people for intergroup loans is disgusting," says Yusuf.

Getting at the loot, however, is not easy. So far Yusuf has closed down seven banks, from which he's been able to recover roughly $20 million, a drop in the ocean. But Yusuf is confident the pace will pick up--IBRA has only just begun to fight. Though former President Suharto formed IBRA in January under the goading of the IMF, he had little wish to see it succeed, and the agency floundered. But when B.J. Habibie took power in June, things changed. Habibie--no small player in the patronage stakes himself--realized that he had to be seen as serious about reform to last in office. He appointed Yusuf in July and has supported his use of the state's biggest stick: the threat of criminal prosecution.

Yusuf hasn't been shy in wielding that stick. On Sept. 16, Bambang Trihatmodjo, Suharto's second son and owner of the failed Bank Andromeda, was banned from leaving Indonesia until he is questioned by police about alleged illegal lending practices. As FORTUNE goes to press, the deadline for four other major bank owners to repay their debt to IBRA comes due. If they don't pay up, Yusuf and his colleagues have vowed to charge them with criminal acts.

The cynics think that IBRA will be hobbled by Indonesia's still powerful vested interests. And given the agony that so many Indonesians are already suffering, widespread company closures could spark a backlash. The soft-spoken Yusuf could easily find himself isolated. One thing is certain: What Yusuf does with the assets under his care will determine where Indonesia goes--back to a crony-led system or forward to a more transparent society.