Institutional Banking

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Bank definition

Bank definition under the Act 7 of 1992 concerning Banking as amended in Act No.10 of 1998. that "Banks are business entities that raise funds from the public in the form of savings and channel them to the public in the form of loans or other forms in order to improve the standard of living of the people".

Operation Activities Business Bank

As stated in Law 10 CHAPTER II Section 3, the main operational activities of Indonesia's banking business is as collector and distributor of public funds. Which aims to support the implementation of national development in order to improve the distribution of development and its results, economic growth and national stability, towards improving the living standard of the people. Bank as a financial intermediary,

providing financial services to both the unit surplus and deficit units.

In this case the Bank perform three functions (Siamat 2001:88) main banks are:

A. Provides a mechanism and an efficient means of payment

2. Collect funds and distribute it to the public.

3. Offering services in payment traffic.

Types of Bank

Based on the bank of its kind can be divided into:

In accordance with Law no. 10 of 1998, Chapter III Article 5, according to bank types distinguished by:

A. Commercial Bank

Commercial Bank is a bank conducting conventional business and or based on Sharia principles in its activities providing services in a payments traffic, while

2. Rural Bank (RB).

BPR is a bank conducting conventional business and or based on Sharia principles in their activities do not provide services in a payments traffic.

In terms of bank ownership be divided into:

In accordance with Law no. 10 of 1998 Chapter IV Article 16, according to bank ownership be divided into:

A. The Government Bank

State banks are banks whose capital comes from and cultivated by the government, the average of its founding, the organization, duties and powers and responsibilities of directors and other matters specified in the Act.

2. National Private Bank

National private banks, namely Bank Indonesia legal entity that is partly or wholly owned by Indonesian citizens or Indonesian legal entity.

3. Regional development banks (BPD),

Regional Development Bank which is Bank owned and managed by local government in which the Bank is located.

4. Mixed Foreign Bank.

A mixture of foreign banks namely Bank of all or part of their business capital, originate from and cultivated by foreign legal entity or a mixture of Indonesia and limited liability company (PT).