Professional Documents
Culture Documents
COMERCIAL BANK
By:Group 2
Members : Jussara Riska Amelya (17053019)
Fitria Rahmona (17053092)
Hanifah (17053132)
ECONOMIC EDUCATION
ECONOMIC FACULTY
UNIVERSITAS NEGRI PADANG
2019
FOREWORD
Praise the presence of Allah S.W.T who has given His grace and gifts, so that we can
finish this paper entitled "Commercial Bank" properly.This paper is made in order to fulfill the
duties of the Bank Course and non-bank financial institutions. And we thank our lecturer, Prof.
Dr. Bustari Muchtar and Ibuk Menik Kurnia Siwi S.Pd M.pd who provided guidance,
suggestions, ideas and opportunities for us to dig deeper information about the economy in
Indonesia. We hope that with this paper, we can add knowledge and hopefully this task can be
useful for us all.
We realize that our paper is not perfect. For that we need constructive criticism and
suggestions from friends and also Mr. and Ibuk as lecturers of Bank Subjects and Non-Bank
Financial Institutions.
Finally, we express our gratitude and hope that this paper can provide information and
be useful for the development of science for all of us.
Padang, 05 September2019
Author
CHAPTER 1
WRITING PURPOSE
1. To Know the Definition and History of the Bank
2. To Know the Types and Functions of Banks
3. To Know the Bank's Activities
4. Can Understand Any Factors That Affect Interest Rates
5. To Be Able To Know Bank Developments in Indonesia
6. Can Know What Are Classified In Bank Secrets
7. To Be Able To Know Banks As Intermediaries And Supervisors
8. Can Understand Bank Architecture in Indonesia
CHAPTER II
DISCUSSION
a. Bank Definition
According to Kasmir (2008: 25) Banks are financial institutions whose main activities
are accepting deposits, savings and deposits. Then the bank is also known as a place to
borrow money (credit) for people who need it.
Understanding of the bank from the opinion of Setiyaningrum and Farah (2011) in his
journal stated that the Bank is a trust institution that functions as an intermediary
institution, helps smooth the payment system, and no less important is as an institution
that is a means of implementing government policy, namely monetary policy.
Based on a number of understanding of the above banks, it can be concluded
that the bank is a financial institution whose activities are raising funds and channeling
funds from and to the public that has the function of facilitating payment traffic. In
other words, a bank is a financial institution whose principal business is providing credit
and services in payment traffic and money supply.
b. Bank History
History records the familiar origins of banking activities in the days of the old
empire in mainland Europe. Then this banking business developed into West Asia by
traders. The development of banking in Asia, Africa and America was brought by
Europeans when they colonized their colonies in Asia, Africa and the American
continent. If traced the history of banking activities known from the money exchange
service. So in the history of banking, the meaning of the bank is known as a table where
you can exchange money. In the course of the kingdom's past history, it was possible
to exchange money between one kingdom and another. This money exchange activity
is now known as a money changer.
Then in the history of the bank further banking operations developed into a place
for depositing money or what is now called savings activities. Next, banking activity is
increased with money loan activity. Money saved from the public by banks is lent back
to the people who need it. Other bank services follow in accordance with the times and
the increasingly diverse needs of the community. As a result of the community's need
for financial services has increased and varied, the role of the banking world is
increasingly needed by all levels of society both in developed and developing countries.
Even today the development of the banking world is increasingly rapid and modern,
banking increasingly dominates the economic and business development of a country.
Even the activities and the existence of banks determine the progress of a country.
Along with the development of world trade, the development of the banking
industry is also increasingly rapid because the development of the banking world cannot
be separated from the development of trade. The development of trade initially only in
mainland Europe and eventually spread to West Asia. Banks that were already famous
at that time on the European Continent were the Venetian Bank in 1171, then followed
the Bank of Genoa and the Bank of Barcelona in 1320. Conversely the development of
banking in mainland England only began in the 16th century. However, because Britain
was so active in searching for trade areas which were later colonized, banking
developments were also brought to its colony. When he returned to the Unitary State of
the Republic of Indonesia (NKRI) on August 17, 1950, the structure of the Indonesian
economy was still dominated by the colonial structure. Although at that time the
Indonesian banking structure was arguably a component of monetary facilities that did
not play a large role in banking operations, this condition created a strong desire from
the public to include more national elements in the Indonesian economic structure.
Bank Indonesia was born after the enactment of the Central Bank Act (Law) on
July 1, 1953. In accordance with the Act, BI as the central bank is tasked with
overseeing banks. However, the rules for implementing the supervision provisions have
only been stipulated in Government Regulation (PP) No. 1/1955 which states that BI,
on behalf of the Monetary Board, carries out bank supervision of all banks operating in
Indonesia, in the interests of the solvency and liquidity of the credit agencies and the
provision of sound credit based on principles of appropriate bank policy. From BI
supervision and examination, various unfair practices were revealed, such as fictitious
capital deposits or even the practice of banks in banks. To overcome this banking
condition, Monetary Board Decree No. 25/1957 which prohibits banks from carrying
out activities outside banking activities.
In November 1957, the National Development Conference (MUNAP) was held
which among others decided to take over Dutch-owned companies, including banks.
The initial step for the nationalization of the Dutch banks was initiated by the KSAD
as the military authority which stipulated that supervision of the administration of
Dutch banks was entrusted to the Central Dutch Bank Supervisory Agency. The
supervisory body was established in every region of the Netherlands owned branch
bank with the name of the Supervisory Board of Regional Banks with the aim of
preventing the run at Dutch banks in connection with the nationalization of the
government. Supervision of the Dutch banks is carried out directly by placing a
supervisory team at each bank. The role of Bank Indonesia in this supervision is very
important because only Bank Indonesia has personnel who have mastered bank
supervision and inspection techniques.
Government policies to nationalize Dutch companies are stipulated in Law No.
86/1958 which retroactively applied until 3 December 1957. The nationalization of the
Dutch banks which were foreign exchange banks was carried out based on the principle
of prudence so that there was no loss of state reserves. For this reason, the Central Bank
Supervisory Agency maintains the old bank's supervised directors. Some of the Dutch
banks nationalized at the time were Nationale Handelsbank which in 1959 became a
State Commercial Bank (BUNEG), Escomptobank in 1960 was changed to State Trade
Bank (BDN), and Nederlandsch Handel Maatschappij N.V. (Factorij) which in 1957
was incorporated into the Farmers and Fishermen Cooperative Bank (BKTN) which
was the result of the merger of Bank Rakyat Indonesia (BRI) with the Farmers and
Fishermen Bank (BTN).
If the banks owned by the Netherlands were nationalized by the government,
then it was different with foreign banks that were not owned by the Dutch. With the
principle of self-reliance and the spirit of nationalism that continues to surge, in the
1950s the government declared the closure of several foreign (non-Dutch) banks,
namely the Overseas Chinese Banking Corporation, the Bank of China, and Hong Kong
and Shanghai Banking Corp. based on Government Regulation No. 2/1959. The history
of the next bank, especially in Indonesia will be shared in a special article on this blog.
a) Types of Banks
1) Commercial Bank
According to RI Law No.10 of 1998 concerning Banking states "Commercial banks are
banks that carry out conventional business activities and or based on sharia principles in
their activities to provide services in payment traffic". Bank's activities include:
collect funds from the public in the form of deposits in the form of demand deposits,
time deposits, certificates of deposit, savings.
give credit.
issue a debt acknowledgment.
buy, sell, guarantee their own risks and interests and at the behest of their customers.
move money both for own interests and the interests of customers.
According to RI Law No. 10 of 1998 Bank Perkreditan Rakyat (BPR) is a bank that
conducts business activities conventionally and or based on sharia principles in which its
activities do not provide services in payment traffic.
According to Kasmir (2008, 36-37) the types of banks based on their ownership
are divided into two namely state-owned banks and private-owned banks.
a. Government-Owned Bank
Is a bank whose entire capital is partly or partially and its establishment
certificate is established by the government.
b. Private-Owned Bank
Is a bank whose entire or partial capital and certificate of incorporation is
established by the private sector.
- Types of Banks Based on Status
Types of banks based on status can be divided into two, namely foreign
exchange banks and non-foreign exchange banks (2008 b: 39-40).
b) bank functions
Specifically, there are three bank functions, namely as agent of trust, agent of
development, and agent of service (Sigit Triandaru & Totok Budi Santoso, 2006: 9).
a. Agent of Trust
As a trust institution, banks have a financial intermediary function, namely
collecting funds from people who are excess funds (depositors of funds or creditors)
and channeling it to those who need funds (borrowers of funds or debtors). This
financial intermediary function will run smoothly if there is an element of trust. In this
case the community will save their funds if it is based on an element of trust and the
bank itself will place and distribute funds to the debtor or the public if it is based on the
element of trust as well.
b. Agent of Development
The monetary sector and the real sector cannot be separated in the economic
activities of the people. The two sectors interact with one another to influence one
another. The real sector will not work well if the monetary sector does not work well.
The function of the bank as a collector and distributor of funds is indispensable for the
smooth running of activities aimed at community economic development, such as
production, distribution, investment and consumption of goods and services.
c. Agent of Services
The function of the bank in this case offers a variety of services in addition to
conducting collection and distribution of funds, the bank also offers other banking
services to the public. Services offered by banks such as money transfers, collections,
letters of credit, automated teller machines, money markets, capital markets, and others.
The services offered are closely related to the smooth economic activities of society in
general.
3. BANK ACTIVITIES
So that the benefits of banks can be maximized, the bank management must be clever
in determining the size of the interest rate component. This is because if one determines the
size of the components of the interest rate, it will be detrimental to the bank itself. The factors
that influence interest rate determination are:
a. Fund Requirements
The fund requirement factor is specific to the deposit fund, that is, how much
the desired funding needs. If the bank is short of funds, while the loan application
increases, what the bank does so that this can be quickly fulfilled is by increasing the
deposit interest rate. But an increase in deposit rates will also increase lending rates.
Conversely, if there are a lot of funds in savings in the bank, while the loan application
is small, the deposit interest will go down.
b. Desired Target Profits
This factor is specific to loan interest. This is due to the profit target is one
component in determining the size of the loan interest rate. If the desired profit is large,
the loan interest is also large and vice versa. But to deal with competitors the target
profit can be reduced to a minimum.
c. Quality Guarantee
Quality assurance is also intended for interest. The more liquid the collateral
(easy to be disbursed) is provided, the lower the loan interest charge and vice versa.
d. Government Policy
In determining deposit and loan interest, banks cannot exceed the limits set by
the government. This means that there is a maximum limit and there is a minimum
limit. The aim is for banks to be healthy.
e. Duration
For both deposit and loan interest, the time factor is crucial. The longer the term
of the loan, the higher the interest. This is due to the large possible risk of traffic jams
in the future. Vice versa if the loan is short term, then the interest is relatively low.
However, for the deposit interest applies vice versa, the longer the period of time the
lower the interest savings and vice versa.
f. Company reputation
The company's reputation also determines interest rates, especially for loan
interest. The bona fide of a company that will obtain credit will determine the level of
interest rates that will be charged later, because usually bona fide companies the
possibility of bad credit risk in the future is relatively small and vice versa companies
that are less bona fide factors of bad credit risk is quite large.
g. Competitive Products
Competitive products determine the size of the loan. Competitive means that
the product being financed is very popular in the market. For competitive products, the
loan interest rate is relatively low when compared to less competitive products. This is
due to competitive products having high product turnover rates so that payments are
expected smoothly.
h. Good Relationship
Loan interest is usually associated with factors of trust in a person or institution.
In practice, banks classify their customers between uatam (primary) and ordinary
(secondary) customers.
i. Competition
In an unstable condition and the bank is temporarily short of funds, the level of
competition in fighting over deposit funds is quite tight, so banks must compete closely
with other banks.
The second period was marked by etatism which was reflected in the period of
Indonesian socialism, characterized by numerous direct regulations and interference by the
state in the fields of production and distribution including credit. Interventions in the economy,
including credit and monetary, cause fraud and abuse
The New Order government since 1966 began to rationalize the banking function and
economic and development policies, relying on market mechanisms and promoting efficiency.
Then the monetary, banking and credit system restructuring will be carried out. The interest
rates on deposits and loans that were determined to be very low and irrational were raised
dramatically in mid-1968. This monetary action was also part of the anti-inflation program
launched at that time. The policy to determine the size of the Bank Indonesia liquidity credit
portion will henceforth be the core of credit and banking policies.
In the times, bank institutions are institutions that are increasingly trusted and needed
by the public both in managing funds owned by the community and institutions as providers of
funds for people in need. Here I will briefly discuss bank secrecy according to the laws in force
in Indonesia. Bank secrecy is everything related to finance and other matters of bank customers
which, according to the banking world, must be kept confidential. The bank secrecy covers
customers, creditors, and debtor customers as regulated in Act Number 7 of 1992 concerning
banking.
In its development, the notion of bank secrecy has been amended by the enactment of
law Number 10 of 1998 that bank secrecy is anything related to information regarding
depositors and deposits.
c. Police officers, prosecutors or the judiciary benefit the interests of the judiciary in criminal
cases
e. Banking circles who need information on the financial condition of bank customers in the
context of exchanging information between banks
f. Other parties appointed by the depositing customer upon request, approval or power of
attorney of the depositing customer
g. The legal heirs of the depositing customer in the case of the depositing customer has died.
Asymmetric information opens up opportunities for those who have more information
to not disclose the information properly. The opportunity not to disclose this information is
interesting because such actions can have beneficial monetary consequences. The implication
of asymmetric information in the form of choices to convey information is not good in order
to obtain monetary benefits called moral hazard which means the risk of delivering information
that is not in accordance with reality by the borrower to the lender in order to obtain monetary
benefits. This moral hazard is a real problem that occurs between the relationship of the
borrower and the lender, which opens up opportunities for inefficiencies in the money market
due to asymmetrical information.
To reduce or minimize the negative impact of this asymmetric information means that
certain actions must be taken. The problem of formulating certain actions so that those who
have more information do not abuse the advantage of access to information is called the
problem of incentives (incentive problems) which then becomes a problem that must be solved
in the relationship of borrowers and lenders.
It is important to realize that the actions of the supervisory delegation incur substantial
costs to achieve a goal. The goal is to get a certain rate of return from the distribution of funds.
Theoretically, this problem can be modeled in the form of minimizing the cost of supervisory
delegation and / or expected rate of return for entrepreneurs with certain rate of return
constraints for borrowers.
Starting from the desire to have stronger banking fundamentals and by taking into
account the input obtained in implementing the API for the past two years, Bank Indonesia felt
the need to perfect the program activities listed in the API.
To realize the achievement of the API vision, the following six pillars of the API are
determined:
a. Creating a healthy domestic banking structure that is able to meet the needs of the community
and encourage sustainable national economic development.
b. Create an effective bank regulation and supervision system and refer to international
standards.
c. Creating a banking industry that is strong and has high competitiveness and has a resistance
to risk.
d. Creating good corporate governance in order to strengthen the internal conditions of the
national banking system.
Financial services is one of the industries that is experiencing the fastest change and
growth in many countries. Something that is considered ideal at one time can be quickly change
at a later time. The challenges in the banking world also always change along with the changes
that occur in the financial services industry in general. Among the many challenges that are
currently most felt in the banking world is the challenge to manage risk as well as possible. For
the banking system in Indonesia, good risk management is still a new thing.
The challenges facing the banking world today are as follows:
1. What are BRI's bank activities to serve and provide a good service for the community?
Bank BRI carries out services to the community in the form of sub-sectors in crediting,
operational and operational techniques. From the operational bidag section, it prioritizes
services on salary deduction and salary addition, making checks.
2. What factors have influenced the interest rates at BRI banks that have increased?
The level of interest is influenced by the policies of the government and Indonesian banks
The updated interest rate is currently 2019 at the BRI bank Khatib Sulaiman branch
• 6 months 5% deposit
• 1 year deposit of 5%
The BRI Bank itself may not provide information directly about the balance to the public
because it is the privacy of a customer of the BRI bank, does not divulge or explain customer
transactions, and say the customer's address.
4. The organizational structure of the BRI branch of khatib sulaiman
5. Khatib branch BRI bank architecture
In BRI's own bank the architectural model that is made is to arrange the same spatial
arrangement through chairs, tables and so on. There is something more unique where in every
corner of the room or on the table be it a teller or the other BRI bank itself provides live interest
and provide a beautiful layout both from the entrance or the upper part for the bank employees
themselves.
6. Bank BRI as an intermediary and supervisory institution
BRI as an intermediary institution means here the same as the goal of the bank to collect funds
from the public and will be used by the community. Whereas as a supervisor is overseeing the
running of financial transactions, for example there are suspicious transactions such as money
laundering that must be reported by BRI banks.