Understanding of Bank, Bank Types, Functions Bank, and Bank Reform
A. Definition Bank
Regarding the meaning of the bank can be sure everyone has understood, both studied at the school or the school does not definitely know the general sense of the bank. Although not everyone has savings in the bank, but the bank said often encountered in daily life, such as ads on TV that often feature advertisements bank, or when traveling we see the bank building.
I think we all agreed that the short meaning of the bank is a place to save money or save money, and also a place to borrow money. In this article we will discuss a complete understanding of the bank, from the origin of the word bank, banks in general sense, and understanding of the bank according to the shrimp government code.
The origin of the word is from the Italian bank that is banca which means the exchange. In general terms the bank is a financial intermediary that is generally established with the authority to accept deposits, lend money, and issue promissory notes, known as a banknote.
While understanding the bank according to the Law of the Republic of Indonesia Number 10 of 1998 dated 10 November 1998 on banking, which is the bank is an entity that collects funds from the public in the form of savings and channel them to the public in the form of loans or other forms of order to improve the standard of living of the people.
From the definition of banks according to the Law of the Republic of Indonesia Number 10 of 1998, it can be concluded that the banking business includes three activities, namely collecting funds, funds, and provide other banking services. Activities of collecting and distributing funds is the bank’s main activities, while other banks provide services only support activities. Event to raise funds, in the form of raising funds from the public in the form of demand deposits, savings and time deposits. Usually he is given an attractive fringe benefits such as, flowers and gifts as an incentive for people to be more pleased save. Activity funds, in the form of lending to the public. While other banking services provided to support the smooth operation of the primary.
B. Type of Bank
1. The Central Bank, the bank that its work in issuing banknotes and coins as legal tender in the country and maintain the conversion of such currency against gold or silver or both.
2. Commercial Bank, the bank that not only can lend or invest the various types of savings are gained, but can also provide a loan of creating its own demand deposits.
3. Rural Banks (BPR), which is a bank conducting conventional business or based on sharia principles in their activities do not provide services in payment traffic.
4. Islamic Bank, the bank that operates on the principle of profit sharing (according to the rules of Islamic teachings on usury law).
C. Function Bank
1. Grouper funds to perform its function as a collector of funds, the bank has several sources that in general there are three sources, namely:
a. Funds sourced from its own bank in the form of a capital injection of establishment.
b. The funds raised from the public collected through the banking business such as business demand deposits, time deposits and Tabanas.
c. Funds sourced from financial institutions obtained from the loan fund in the form of Credit Liquidity and Call Money (funds that can be withdrawn at any time by bank borrowing) and meet the requirements. Maybe you’ve heard some banks liquidated or suspended their business, one reason is because many problems or bad credit.
2. Distributors funds collected by the bank distributed to the public in the form of loans, purchase of securities, investments, ownership of fixed assets.
3. Waiters Bank Services in the task as “servants of traffic payment” to perform various activities including money transfer activities, collections, travel checks, credit cards and other services.
As for the specifics banks may serve as an agent of the trust, the agent of develovment and agents of services.
1. Distributors / giver Credit Bank in its activities not only keep the proceeds, but for their utilization in the form of bank loans channeled back to the people who need fresh funds to the effort. Of course, in the implementation of this function is expected the bank will get a source of income in the form of profit-sharing or in the form of imposition of lending. The extension of credit would pose a risk, therefore, the gift must be really careful
1. Agent Of Trust
An organization whose foundation trust. The main basic banking activities is the confidence (trust), both in the fundraiser and disbursement of funds. The public will be willing to keep their money in the bank if the fund is based on trust. In this function will be built trust both the depositors or from bank and trust this will continue to debtors. This trust is important to establish because in these circumstances all parties want to feel disadvantaged for both in terms of diversion of funds, container and receiving funds disbursement of these funds.
2. Agent Of Development
That institution that mobilizes funds for economic development. Activities of the bank in the form of collector and distributor of funds is necessary for smooth economic activities in the real sector. The bank’s activities allow communities to investment activities, activities of distribution and consumption of goods and services activities, given that the investment activity, distribution and consumption can not be separated from their use of the money. Smooth operation of the investment, distribution, and consumption is nothing other than the economy of a community development activities.
3. Agent Of Services
That institution that mobilizes funds for economic development. Besides conducting collector and distributor of funds, the bank also offers other banking services to the Community. Services offered by the bank is closely linked to the economic activity of society in general.
D. Bank Reform
PAK JUN 1983
June 1983 is a package of banking policies issued on June 1, 1983 is also known as non-ceiling package policy in the banking sense was exempt from the upper limit (ceiling) rate. This means that banks are allowed to determine the interest rate offered to the public according to its discretion. Bank loan interest rates may offer the most cost though so too should the bank offers interest rates sky-high savings or deposits. The consideration is the interest rate was repatriated to the respective banks along following the economic prnsip ie as long as they ensure the survival of the bank.
Principles of banking deregulation policy 1 June 1983 namely:
1. Capping credit (ceiling policy) exempt means each bank can hold a credit expansion by the management of each bank as long as the bank has sufficient funds Loanable.
2. Loanable funds that bersumberkan of credit and bank liquidity Indonesia (KLBI) is restricted and only granted to credits that are a priority.
3. Each bank is free to determine the interest rate deposit and loan interest.
PAK TO 1988
Policy kebijakan package 1 June 1983 in terms of resource mobilization and increasing efficiency is the basis resumption of banking deregulation in banking. Indeed, one of the goals and deregulation in banking is to create an environment that encourages healthy business competition among banks to improve efficiency in their business activities.
In early 1988, the economic situation in Indonesia began to improve. This encourages pemerntah to continue and further widen the policy of deregulation in the banking sector, namely the issuance of a policy package 27 October 19 988 (Pakto 1988) which is the point of the “liberalization in the banking sector”.
The purpose of Pakto 1988 namely:
a. Increased mobilization of funds and fund alokas
b. Utilization of financial institutions and banks to bergfunsi as a transaction means to encourage the export of non oil and gas
c. Increased efficiency and ease of establishment of banks
d. Control of monetary policy as well as the creation or development of the capital market climate.
In general, the purpose of the launching of deregulation can be concluded:
a. Simplifying the process of economic activities.
b. Emphasis-ongks non-productive costs in the economy.
c. The efficiency of the institutions of economic actors.
d. Reduction of government interference in the economy
e. Increases greater private sector role in the economy.
f. Promoting the competitiveness of products in the country is more reasonable in the international economic arena.
source: ferdinand