Bank's Strategy to Deal with "Irresponsibles Debtors"

Recently, there have been cases of debtors or consumers who have corrupted the bank where they borrowed money to the judiciary. Instead of being well-intentioned in fulfilling his obligations, this "irresponsible debtor" is challenging the bank that gave the loan to fight in court.

What do banks have to do when faced with "irresponsible debtors"?

Fransiska Oei, Head Division of Legal Studies & Environmental, Social,and Governance (ESG) at PERBANAS, gave advice and input to PERBANASNews.Here's the quote:

When there's a client who doesn't have the good will to fulfill his obligations and even legally incriminate the bank, how does the bank see this?

Actually, there's nothing new about this. There has always been clients with no good intentions who instead have their cases reported to the court. Per, it's a bit more crazy now because it'll be a social media era, so it'll be booming. Therefore, the news, which was before but is not visible, is now visible.
Then, indeed, today's digital trends, besides having a positive impact, also carry their own risks. With the fraud that uses social media, as well as fishing people to give data and so on, it's becoming more and more apparent. But, again, there's nothing new about this.

What should the banks do when faced with such cases?

Prevention is important. So, how do we think the bankers can prevent fraud from the first stage, namely customer identification? Who is this customer? What's the problem? Maybe sometimes we want to quickly give a good service. However, if you don't take enough care, it'll be risky.

Then, do a credit analysis of the customer. For example, if he's a retailer, where does his income come from, and whether the data provided corresponds to the given profile? Well, once the analysis is done properly, the next thing is documentation. Our documentation must also be fairly transparent and balanced, but it also requires protection. So from there, there's a need for surveillance. So, if there's any bad indications, we could take action. Well, if all these steps have been taken and it turns out to be brought into the realm of law, yes we should do our best to follow that legal process.

According to PERBANAS, are the positive laws in Indonesia sufficient to provide protection for the banking authorities?

Actually, the positive legal device already exists. I'm talking structurally; it exists already. We've got a trial. We also have the so-called Lembaga alternatif Penyelesaian Sengketa Sektor Jasa Keuangan (LAPS SJK), which specializes in financial services.

Actually, the positive legal device is quite complete. When the case is complex, the question is whether being part of the legal device is sufficiently dominant or not. It's also one part we need to look at.

From the positive legal instrument that exists, what is Perbanas' input to the government or related parties?

The legal instruments are indeed quite complete. However, there is one thing that sometimes makes the resolution of a case take a long time. If I compare it with abroad, the resolution of cases in the legal realm is very fast and transparent. Here, the resolution of the case takes quite a long time, and sometimes it is also less transparent and less clear. This increases costs for the bank.

If asked, why are bank interest rates in Indonesia so high compared to abroad? This is one to consider. Because if there's a legal problem, it takes a long time to resolve it, and the outcome is unclear. We think it's supposed to be obvious, but the results aren't as good as we expected. The process is still not transparent.