MEDAN, INDONESIA — Indonesia’s banking sector plays a vital role
in supporting national economic development. However, uncertainty in banking
regulations can create significant challenges for bank officials when making
business decisions.This issue is examined in a recent
study by Rizki Pratama and Ida Nadirah from
the Universitas Muhammadiyah Sumatera Utara. Their research,
titled “Legal Certainty and the Harmonization of the Principle of
Prudence: A Reconstruction of Bank Compliance Parameters in the Discourse on
the Business Judgment Rule,” was published in the Journal of Legal
and Cultural Analytics (JLCA), Volume 5, Number 1, 2026, pages 49–56.
The study examines the relationship
between the principle of prudence in banking, legal certainty, criminal
liability, and the Business Judgment Rule (BJR) in Indonesia. According to the researchers,
Indonesian banking regulations face a potential tension between Law No. 10
of 1998 concerning Banking and Law No. 40 of 2007 concerning Limited
Liability Companies.Under the Company Law, directors are
required to manage companies in good faith and with full responsibility. The
Business Judgment Rule also provides protection for directors from personal
liability for company losses when their decisions are made based on sufficient
information, without conflicts of interest, and with prudence.
However, the Banking Law contains
criminal provisions concerning bank officials who fail to take necessary steps
to ensure compliance with applicable legal requirements. The researchers point
out that the phrase “steps to ensure compliance” lacks sufficiently
clear legal parameters. This ambiguity may create uncertainty about whether a
particular decision represents legitimate business risk or constitutes a
criminal violation.
Distinguishing
Business Risk from Criminal Conduct
One of the main concerns raised by
Rizki Pratama and Ida Nadirah is the need to distinguish
between legitimate business risks and criminal conduct.Banking activities inherently involve
business risks. For example, credit decisions may result in non-performing
loans even when they have been made following professional procedures and
adequate risk assessments.The researchers argue that a business
decision resulting in financial loss should not automatically be classified as
a criminal act. Instead, the decision should be examined based on whether it
was made using adequate information, rational risk considerations, professional
standards, and good faith.
The Business Judgment
Rule can therefore serve as an important legal instrument for
distinguishing reasonable but risky business decisions from actions that
genuinely constitute criminal violations.
The study identifies three important
objectives of applying the Business Judgment Rule in banking.
First, it can help prevent the
criminalization of directors and bank employees who have properly fulfilled
their professional responsibilities. Second, it can provide greater legal
certainty for banking professionals when making business decisions. Third, it can strengthen corporate
governance by encouraging management to make decisions based on adequate
information, proper documentation, and prudential considerations.
Unclear
Compliance Parameters
The researchers further highlight the
problem of unclear parameters concerning banking compliance. According to the study, the absence of
clear standards for determining whether bank officials have fulfilled their
compliance obligations can contribute to differences in legal interpretation
and court decisions. The study discusses Bank Permata
Decision No. 666/Pid.Sus/2020/PN.Jkt.Sel as an example of the legal
uncertainty surrounding the enforcement of banking prudential principles. The
researchers note that bank officials were sentenced even though the Financial
Services Authority (OJK), as the supervisory authority, had not identified
violations or issued investigative reports in the circumstances examined by the
study.
The researchers also argue that a non-performing loan (NPL) should not automatically be regarded as evidence of a violation of the prudential principle. Banking is inherently associated with business risks, and losses can occur even when decisions are made through legitimate professional processes. Therefore, the existence of a financial loss alone should not necessarily become the basis for criminal liability.
Strengthening
the Role of OJK
To address the problem, Rizki Pratama
and Ida Nadirah propose strengthening the role of the Financial Services
Authority (OJK) in banking supervision and compliance enforcement. The researchers emphasize the
importance of the ultimum remedium principle, under which criminal law
should function as a last resort after administrative or supervisory measures
have proven ineffective. Under their proposed approach, an
alleged failure to comply with banking requirements should first be addressed
through administrative supervision. Measures such as an Action
Plan or Cease and Desist Order could be used before criminal law
enforcement is initiated.
The researchers propose three main
parameters for reconstructing the prudential principle:
1. Procedure Compliance — ensuring
that supporting documents for credit and other banking decisions are valid and
legally binding.
2. Professionalism — ensuring that
bank officials perform their duties based on professional competence, honesty,
and objectivity.
3. Authority Clearance — ensuring
that criminal enforcement is pursued only after an OJK assessment indicates
that administrative improvements have failed or that there is clear evidence of
criminal intent (mens rea).
Toward
Greater Legal Certainty
The study concludes that Indonesia
needs greater harmonization between the Banking Law and the Company Law.Rizki Pratama and Ida Nadirah argue
that the principle of prudence should not become an overly broad provision that
exposes banking professionals to criminal liability simply because a business
decision results in financial losses.Instead, prudential banking standards
should be assessed through objective parameters, including professional
conduct, procedural compliance, and compliance with administrative instructions
issued by the supervisory authority.The researchers also emphasize the
importance of integrating the Business Judgment Rule and
the ultimum remedium principle into banking law enforcement. Such an
approach could help establish a better balance between banking supervision,
business risks, criminal law enforcement, and legal certainty.
The research by Rizki Pratama and Ida Nadirah provides an important legal perspective on the challenges facing Indonesia’s banking sector. By establishing clearer compliance parameters and strengthening the coordination between administrative supervision and criminal law enforcement, the researchers argue that Indonesia can provide greater legal certainty while continuing to maintain the prudential standards necessary to protect the stability and public trust of the banking sector.
Link Jurnal : https://journal.formosapublisher.org/index.php/jlca/article/view/16373
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