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The Constitutional Court (MK) granted the petition for judicial review of Article 12A paragraph (1) of Act of the Republic of Indonesia Number 7 of 1992 concerning Banking as Amended by Act Number 10 of 1998 which was submitted by BPR Lestari.
Now, rural banks (BPR) may legally participate in auctions to purchase collateral from Debtor Customers who fails to settle their loan obligations to the Bank through auctions and non-auctions.
This decision also shows that rural banks (BPR) have the same role as commercial banks in providing financial services to the public.
“There are some obstacles to us, Rural Banks (BPR) to settle their bad debts during the collateral auction. Once there are no one wants to purchase the collateral, BPR cannot buy that either. In the end, bad debts become adrift and cannot be settled or resolved,” said the CEO of BPR Lestari Bali, Pribadi Budiono.
This submission for judicial review also represents all rural banks (BPR) that experience the same difficulty in resolving bad debtor loans.
“Great gift for rural banks (BPR). In this pandemic situation, lots of our loan customer faced difficulties related related to loans and it affects our business and industry. With the presence of the government that provides protection through this Constitutional Court decision, rural banks (BPR) have facilities that can be used to legally secure their assets and/or be protected by the state. Thus, efforts to resolve the defaulted debtor can be chosen persuasively or through legal channels. And for all of those efforts, there are legal facilities, "said I Made Suarja, S.H, Committee of DPD Perbarindo Bali, and President Director of BPR Udary.
The Constitutional Court's decision provides legal certainty for the rural bank (BPR) industry to resolve bad debts, which in turn will nourish the banking industry as a whole. However, Pribadi also dismissed the presumption that banks would aggressively execute (debtor's) assets or collateral.
"It is untrue, unreasonable, and illogical if it is rumored that banks are trying to forcibly take away their customer's assets. Our job is to collect on the loans. The bank always tries its best for it. The sustainability of the customer's business is our future. If there are difficulties or obstacles, come to negotiate with us to find a way out”, said Pribadi.
"If the debtor fulfills their obligations, there is no power whatsoever that can compel the bank to execute the customer's collaterals. We just want our loan money back. We don't want assets. The loan is the depositor's money that was mandated to us at the bank. It is our duty to seek repayment of the loan, " thus closed Pribadi.
"Once again, representing the Institution of Perbarindo Bali, industrially, thanks to BPR Lestari for the fight, also thanks to the team and stakeholders, expert witnesses, and others who have succeeded in equating Rural Banks (BPR) with Commercial Banks, especially in terms of participating in auctions," added I Made Suarja.
