I Goesti Viraguna Bagoes Oka testifying as an expert for the Petitioner virtually at the material judicial review of Article 12A paragraph (1) of Law No. 10 of 1998 on Banking, Wednesday (18/8/2021). Photo by Humas MK/Ifa.
Wednesday, August 18, 2021 | 17:41 WIB
JAKARTA, Public Relations—One of the main instruments that BPRs (microcredit banks) must have is the authority to take over the collateral owned by customers with nonperforming loans. This authority has become important and urgent amid the COVID-19 pandemic and the level-4 emergency public activity restriction (PPKM), said I Goesti Viraguna Bagoes Oka, former Chief of Bali Representative Office of Bank Indonesia (BI), at a material judicial review hearing of Article 12A paragraph (1) of Law No. 10 of 1998 on the Amendment to Law No. 7 of 1992 on Banking. The fifth hearing for case No. 102/PUU-XVIII/2020 was held by the Constitutional Court (MK) on Wednesday, August 18, 2021
“In order to realize a prudent, healthy, and trustworthy BPR, one of the main instruments that a BPR must own is the authority to handle nonperforming loans effectively through the authority to take over collateral,” he said.
Also read: Provision Restricting Collateral Purchase by Banks Challenged
Treated Equally with Commercial Banks
Goesti, who testified as an expert for the Petitioner, said that BPRs should be treated equally with commercial banks and be given the authority to purchase part of or all collateral at or outside of auctions, while complying with the Banking Law. This is because, he added, BPRs as banks must exercise caution in carrying out its functions and businesses to protect the funds that the public has entrusted to them. Banks, including BPRs, must be consistent in complying with statutory laws and regulations as well as show professionalism and good intent. Basically, he added, lending by BPRs needs to exercise prudence in the management of earning assets, including foreclosed assets or AYDA, which also applies to commercial banks.
“The provision of Article 12A paragraph (1) of the Banking Law is still interpreted differently by the auction houses. Therefore, the meaning of the clause in Article 12A paragraph (1) on commercial banks and BPRs must be regulated in the Law,” he said before the bench chaired by Deputy Chief Justice Aswanto. The interpretation, he added, especially concerns deeds and documents by BPRs. He said the a quo norm should be interpreted logically as an open policy.
“Because BPRs, as banks that collect public funds and also provide loans for the community, must have risk mitigation instruments in the form of an option to buy the customers’ collateral when nonperforming loans occur,” he said.
Also read:
Petitioner of Banking Law Revises Petition
House: BPR Can Buy Customers’ Collaterals Through Auctions
Discriminative
At the hearing, the Court also heard a testimony by another expert for the Petitioner, Law Professor of Udayana University Yohanes Usfunan. He said the provision in the a quo norm was discriminative. It only grants commercial banks, but not BPRs, the discretionary authority to purchase customers’ collateral, when in fact, based on the Banking Law the objectives and responsibilities assigned to commercial banks and BPRs are the same—they concern economic activities and other banking businesses.
“Such a discriminatory treatment can be traced from the granting of the discretionary authority to commercial banks. Commercial banks can buy part or all of the collateral, and so on. Consequently, this discriminatory arrangement is against the constitution,” he said.
Yohanes explained that the purpose of Indonesian banking was to support national development in increasing equitable distribution of economic growth, national stability, and improving people’s health in accordance with the ideals of the nation, as stated in paragraph IV of the Preamble to the 1945 Constitution. The realization of these ideals requires financial support that cannot be separated from the functions of Indonesian banking, including BPRs. On that basis, discriminatory treatment of BPRs shown in Article 12A paragraph (1) of the Banking Law is contrary to provisions and must be annulled.
“The discrimination as reflected in Article 12A paragraph (1) is categorized as aggravation or exclusion to BPRs in purchasing collateral, which results in the reduction or restriction to BPRs’ right to purchase collateral. Thus, this is a violation of the law that is constitutionally contrary to the 1945 Constitution, [especially] Article 28D paragraph (1), Article 28H paragraph (2), and so on, Article 28I paragraphs (1) and paragraph (2), and Article 33 paragraph (4). Article 28D paragraph (1) reads, ‘Everyone shall be entitled to fair legal recognition, certainty, protection, and assurance and equal treatment before the law,’” he stressed.
Also read: Bank Indonesia: AYDA, Solution for Nonperforming Loans
Executive director of PT Bank Perkreditan Rakyat (BPR) Lestari Bali, Pribadi Budiono, filed the petition to challenge Article 12A paragraph (1) of the Banking Law, alleging that the provision allows only commercial banks to take over the collateral of bad credit customers.
At the preliminary hearing, the Petitioner claimed to have suffered loss due to the enactment of the phrase “Commercial Banks” in the Banking Law, as it allows only commercial banks to take over the collaterals of customers with nonperforming loans through auctions. Meanwhile, BPRs do not have this right. Therefore, the Petitioner feels he has received discriminatory treatment and injustice in obtaining equal opportunity and benefits for equality and justice that commercial banks receive in taking over its customers’ collaterals of through auction to settle their nonperforming loans.
Writer : Utami Argawati
Editor : Lulu Anjarsari P.
PR : Andhini S. F.
Translator : Yuniar Widiastuti (NL)
Translation uploaded on 8/19/2021 08:16 WIB
Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian version, the Indonesian version will prevail.
Wednesday, August 18, 2021 | 17:41 WIB 330