Application of Business Law Principles to Universal Rural Banks in

Pontianak City in the Framework of the Indonesian G20 Presidency

2022

Pidari Sinaga, Budi Santoso and Paramita Prananingtyas

Universitas Diponegoro, Indonesia

Keywords: Business Law, Banking, Indonesian G20 Presidency 2022.

Abstract: The dynamics of the development of the national economy, spurring developments in the field of law,

namely the “rule of the game” of economic activity. Given the risks and challenges faced by the banking

industry, one of them during the pandemic, the BPR Universal Pontianak city implemented a credit

restructuring program. The G20 presidency in the midst of the pandemic has proven a good perception of

Indonesia's economic resilience to the crisis. Is the application of credit restructuring program in BPR

Universal Pontianak city in accordance with the principles of business law? This research uses normative

juridical research methods and the results of the study show that the credit restructuring program at the

Universal People's Credit Bank (BPR) in Pontianak city has helped the economy return to the growth path,

and encouraged several important reforms in the company's financial sector that are in line with the

principles of business law.

1 INTRODUCTION

One of the pillars supporting national economic

development and nation building can be measured

by a business activity which is reflected in the

increase in the growth of the majority of business

fields throughout the region. This dynamic economic

development is predicted to continue, supported by

increased mobility, financing sources, and other

business activities. To supervise each of these

business activities, legal tools are needed as in the

business field for the advancement of business that

is just and prosperity for the people, especially

business people. In the legal order of business in

Indonesia, the banking world has a very important

role in economic activities where the Bank's very

large role can be utilized by the public as a financial

institution that helps make it easier for the public to

carry out economic activities. One of the banking

activities that really help the community is by

providing credit facilities. Credit facilities are

proven to help the community in developing

businesses so that they can advance the economy of

the community and the state (Halizah, 2022)

The provision of credit facilities to customers is

part of business activities in the banking sector.

Credit is one of the applications of business law that

has procedures based on applicable laws and

regulations. Law Number 7 of 1992 concerning

Banking, as amended by Law Number 10 of 1998,

states that the business activities of Commercial

Banks are to disburse credit (Article 6 letter b). The

credit disbursed by the bank to its customers is a

debt that when as promised must be returned by the

customer as the debtor (Giffary, 2021). According to

Bank Indonesia Regulation number 14/15/PBI/2012

concerning Asset Quality Assessment of

Commercial Banks, credit is the provision of money

or bills that can be equated with it, based on an

agreement or loan agreement between the bank and

other parties that requires the borrower to pay off his

debt after a certain period of time with the provision

of interest (Rismayani).

The Indonesian state has experienced a serious

impact during the Covid-19 pandemic, which

colored the dynamics of the country's economy. This

has resulted in instability in all business activities so

that special handling is needed to restore conditions

in the economic field. One of the business activities

affected by the Micro, Small and Medium

Enterprises (MSMEs) sector has experienced a

decrease in income, making it difficult for MSME

Sinaga, P., Santoso, B. and Prananingtyas, P.

Application of Business Law Principles to Universal Rural Banks in Pontianak City in the Framewor k of the Indonesian G20 Presidency 2022.

DOI: 10.5220/0011863300003582

In Proceedings of the 3rd International Seminar and Call for Paper (ISCP) UTA â

Z45 Jakarta (ISCP UTA’45 Jakarta 2022), pages 5-9

ISBN: 978-989-758-654-5; ISSN: 2828-853X

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

business actors as debtors who have loans to pay

their obligations to the Bank every month. In fact,

there are not a few debtors who default because of

their inability to pay debts. This impact occurred

mutually felt by the Bank as a credit facilitator who

experienced instability and pressure in the turnover

of money. Based on this condition, the Government

through the Financial Services Authority (OJK) in

dealing with economic instability experienced by

Indonesia, has issued several stimuli and policies for

the financial industry, as an effort to anticipate, such

as stock buyback policies and credit restructuring.

With the existence of POJK Number 11 / POJK.03 /

2020 concerning National Economic Stimulus as a

Countercyclical Policy impacting the Spread of

Coronavirus Disease 2019. Where the policy urges

banks to provide relief by lowering lending rates or

extending the credit period. The higher the interest

rate on the loan given, the lower the bank liquidity

rate (Kustina, 2022).

Universal People's Credit Bank (BPR) is a bank,

financial institution that accepts deposits of third-

party funds in the form of deposits and savings, then

distributed back to the community in the form of

loans with a guaranteed house certificate (Certificate

of Property Rights / Certificate of Building Use

Rights). BPR Universal is committed to helping

entrepreneurs in various productive business sectors

in order to develop their business and also help the

wider community to improve the quality of life, in

various aspects, including education, housing, work /

business facilities, and so on. BPR Universal in

Pontianak City also plays a role in implementing

POJK 11/2020 as a stimulus policy in the face of the

Covid-19 pandemic, to implement an asset quality

assessment policy based only on the ability to pay

principal and/ interest installments only and also

implement a credit restructuring policy aimed at its

customers (Dewi 2015).

The credit restructuring program provided by the

government should be implemented by not

bypassing the corridors of business law principles,

because business activities in the banking sector are

part of the scope of business law and supervision is

needed in practice. In order to realize Indonesia's

economic recovery during the COVID-19 pandemic,

which is the agenda of the implementation of

indonesia's G20 Presidency 2022 which is directed

at the interests of the community by involving the

participation of the community directly and also

sustainable finance from a macroeconomic point of

view and financial stability considering that the G20

Presidency in the midst of a pandemic has proven a

good perception of Indonesia's economic resilience

to the crisis.

2 METHODOLOGY

The research method used is the normative juridical

method. Normative juridical research methods are

literature law research carried out by examining

literature materials or mere secondary data

(Soekanto, S., & Mamudji, S, 2003: 13). This type

of normative legal research is the process of finding

the rule of law, legal principles and legal doctrines

to answer the legal problems faced (Fajar, M., &

Yulianto Achmad, 2004: 34). With the approach

method used, namely with the approach of laws or

other laws and regulations and conceptual with

literature studies and deductive logic analysis

techniques related to this problem.

3 RESULTS AND DISCUSSION

People's Credit Bank is a bank that carries out

business conventionally or based on sharia

principles that in its activities do not provide

services in payment traffic. By itself, the People's

Credit Bank is not a bank that creates giral money,

because the People's Credit Bank does not

participate in providing services in payment traffic

(Usman, 2001: 63). Article 1 of the Banking Law

number 2 defines banks as business entities that

collect funds from the public in the form of deposits

and distribute them to the public in the form of

credit and/or other forms in order to improve

people's living standards.

Provisions regarding the Business of People's

Credit Banks (BPR) are regulated in article 13 of

Law No.10/1998, including:

a) Collect funds from the public in the form of

deposits in the form of time deposits,

savings, and/or other forms that are equated

therewith;

b) Provide credit;

c) Providing financing and a placement of

money based on the principle of Shari'a, in

accordance with the provisions stipulated

by Bank Indonesia;

d) Placing its funds in the form of Bank

Indonesia Certificates (SBI) for time

deposits, certificates of deposit, and/or

savings in other banks.

ISCP UTA’45 Jakarta 2022 - International Seminar and Call for Paper Universitas 17 Agustus 1945 Jakarta

The main business activity of the People's Credit

Bank (BPR) is to serve small businesses and

communities in rural areas that are adjusted to the

limitations of the types of services. As well as BPR

Universal which has a commitment to help

entrepreneurs in various productive business sectors

in order to develop their business and also help the

wider community to improve the quality of life, in

various aspects, including education, housing, work /

business facilities, and so on. One type of business

activity from BPR Universal in Pondianak City is to

provide credit facilities to customers in need. During

the Covid-19 pandemic, BPR Universal in Pontianak

City also played a role in implementing POJK

11/2020 as a stimulus policy or debt relaxation

program and the implementation of this policy was

given to 119 debtors. One of the considerations for

the implementation of POJK 11/2020, is that the

implications of the Corona Virus Disease 2019

pandemic have had an impact, among others, on

slowing national economic growth, decreasing state

revenues, and increasing state spending and

financing, so that various government efforts are

needed to save health and the national economy,

focusing on spending on health, social safety nets,

and economic recovery, including businesses and

affected communities. Credit restructuring is a

policy carried out by banks to provide ease of credit

payments to debtors, in order to avoid bad debts

(Giffary, 2021).

In the implementation of bank loan restructuring

referred to in POJK 11/2020, it still refers to POJK

40/2019. Based on POJK 40/2019, credit

restructuring is carried out under the scheme of

(Elucidation of Article, 53):

1) The credit interest rate is lowered,

2) The credit period is extended,

3) Reduction of principal installments of

credit,

4) Reduction of credit interest installments,

5) Addition of credit facilities; and/or,

6) Conversion of credit into Temporary

Capital Participation.

In determining whether the debtor is affected by

Covid-19 or not in the credit restructuring

application based on the bank's self-assessment, the

bank has guidelines that at least explain the criteria

for debtors determined to be affected by Covid-19,

the disclosure of information provided by the debtor

greatly affects the bank's analysis process. Apart

from submitting a credit restructuring application

from a direct debtor, the bank also directly offers a

restructuring scheme to debtors who are considered

affected by Covid-19, of course, with the obligation

to explain the scheme given and its consequences.

Banks in implementing POJK 11/2020 are required

to provide regular reporting to the OJK regarding the

implementation of the policy (Interview, Dr. Benny

Djaja, 2021).

In the process towards economic recovery during

this pandemic, BPR Universal in Pontianak City has

participated in implementing mass policies of the

Government of Indonesia for improvement in the

financial sector, especially banking. In order to

restore stability in business activities themselves,

business actors in the banking sector should not pass

through corridors based on the principles of business

law, namely as follows:

1) The principle of autonomy. Autonomous

business people are aware of the obligations

carried out following the norms or values of

goodness and the positive impact on them;

2) The principle of honesty. By upholding

honesty, business people will easily gain the

trust of customers and clients;

3) The principle of justice. The principle of

justice requires that everyone treats

everyone according to the rules, objectives,

and responsibly. Moreover, fairness can also

mean that neither party is harmed or

disregarded in its interests;

4) The principle of mutual benefit. In doing

business, it must instill this principle so that

all parties involved can benefit and be able

to give birth to a win-win situation;

5) The principle of moral integrity. This

principle is what keeps the business running

well with a good reputation.

In all business activities, the application of

business law principles serves to build and maintain

business stability that can produce values, norms and

behaviors based on business ethics, as well as in the

financial sector, especially banking.

The

implementation of the credit restructuring program

of BPR Universal in Pontianak City is carried out as

an effort to maintain financial and banking stability,

this policy is also an effort to protect consumers of

financial services, especially in banking credit

agreements. Credit restructuring itself changes the

credit agreement, both in a number of its clauses and

other aspects that come with it. For banks as

creditors, credit restructuring efforts are an

important effort to avoid greater losses. In the

banking books and Bank Financial Statements which

are annual reports, it will be known that non-

performing loans include bad loans, so the choice

through restructuring is a form of credit rescue that

is beneficial for banks in avoiding greater losses

Application of Business Law Principles to Universal Rural Banks in Pontianak City in the Framework of the Indonesian G20 Presidency

2022

(Giffary, 2021). This is certainly in line with the

principle of business law, namely the principle of

justice, which the principle of justice itself instills an

attitude to be fair to all parties, by not discriminating

from all aspects, such as economic, legal, or other

aspects and justice can also mean that no party is

harmed or ignored its interests.

Then, on the principle of honesty instill an

attitude as it is based on actual facts, situations and

conditions. The application of this principle also

provides compliance in carrying out various

contracts, commitments, and agreements, which in

this case are credit agreements. By upholding

honesty, the Bank as a creditor gains the full trust of

customers as its debtors.

During the COVID-19 pandemic, the Financial

Services Authority (OJK) provided stimulus in the

form of credit restructuring to banking debtors

affected by COVID-19. The stimulus has yielded

significant results. Based on this, pressures and

crises in various aspects due to the COVID-19

pandemic have encouraged the G20, which has the

capacity to drive recovery on the financial path led

by the Ministry of Finance and Bank Indonesia, the

G20 Indonesia Presidency will present six priority

agendas, namely exit strategies to support a fair

recovery, discussion of scarring effects (pandemic

impacts) to secure future growth, Payment Systems

in the Digital Age, Sustainable Finance, Financial

Inclusion: Digital &SME, and International

Taxation. In addition, it will also discuss ten legacy

agendas that are global issues from previous G20

Presidencies. The implementation of Indonesia's

G20 Presidency 2022 is directed at the benefit of the

community by involving the community's

participation directly in the implementation of a

series of G20 activities. If classified, there are two

benefits of the G20 Presidency for Indonesia,

namely: (Gumilang, 2022)

1. Strategic Benefits

a. The G20 is a strategic forum to discuss

global issues: Global health, financial

stability, climate change.

b. Showcasing efforts to recover the

Indonesian economy during the Covid-19

pandemic.

c. Showcasing Indonesia's role as a meeting

leader that will support the formation of

global policies.

2. Direct Benefits

a. Increase foreign exchange delegation

visits to Indonesia.

b. Reviving the hospitality sector.

c. Support the increase in domestic

consumption.

d. Optimizing the role of MSMEs.

e. Increase labor absorption.

In the recovery strategy in the financial sector,

the G20 must be present to help low-income

countries carry out debt restructuring and debt

management. The G20 Presidency is collectively

working together to ensure the world can recover

quickly after the Covid-19 pandemic. BPR Universal

in Pontianak City, which has implemented several

credit restructuring schemes due to the Covid-19

pandemic, namely in the form of lowering interest

rates, extending the term, suspension of part of

interest obligations, suspension of principal

installments (grace period), as a form of

participation from the G20 Presidency to change the

face of global financial governance, by initiating a

coordinated fiscal and monetary stimulus package,

on a very large scale and is considered to have

helped the world return to the path of growth, as

well as pushed for several important financial

reforms in the banking sector.

4 CONCLUSION

One type of business activity from BPR Universal in

Pontianak City is to provide credit facilities to

customers in need. During the Covid-19 pandemic,

BPR Universal in Pontianak City also played a role

in implementing POJK 11/2020 as a stimulus policy

or debt relaxation program and the implementation

of this policy was given to 119 debtors. In the

process towards economic recovery during this

pandemic, BPR Universal in Pontianak City has

participated in implementing a stimulus policy in the

form of credit restructuring based on the principles

of business law, namely the principle of fairness and

the principle of honesty and has produced significant

results. So the Universal BPR in Pontianak City,

which has implemented several credit restructuring

schemes, is a form of participation from the G20

Presidency, which aims to recover the global crisis

in the financial sector, especially in the banking

sector.

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Application of Business Law Principles to Universal Rural Banks in Pontianak City in the Framework of the Indonesian G20 Presidency

2022