Attorney I Made Sari delivering the subject matter of the material judicial review petition of Article 12A paragraph (1) of Law No. 10 of 1998 on the Amendment to Law No. 7 of 1992 on Banking, Thursday (26/11/2020) in the Plenary Courtroom of the Constitutional Court. Photo by Humas MK/Ifa.
JAKARTA, Public Relations of the Constitutional Court—The provision that allows only commercial banks to take over the collateral of bad credit customers is deemed unconstitutional. Executive director of PT Bank Perkreditan Rakyat (BPR) Lestari Bali, Pribadi Budiono, filed a material judicial review petition of Article 12A paragraph (1) of Law No. 10 of 1998 on the Amendment to Law No. 7 of 1992 on Banking. The preliminary hearing of case No. 102/PUU-XVIII/2020 took place on Thursday, November 26, 2020 virtually.
Attorney I Made Sari claimed the Petitioner had suffered loss due to the enactment of the phrase “Commercial Banks” in the Banking Law, as it allows only commercial banks to take over the collateral of bad credit customers through auction. Rural banks (BPR) do not have this right. “Therefore, the Petitioner feels [he had] received discriminatory treatment and injustice to obtain equal opportunity and benefits for equality and justice that commercial banks receive in order to take over the collateral of its customers through auction to settle their bad credit,” he said at a hearing chaired by Constitutional Justice Enny Nurbaningsih.
Made also revealed that due to a DJKN 2012 letter, the auction of the Petitioner’s bad-credit customers’ collaterals has never been resolved as there are potential bidders. Bad credit cannot be resolved where there are no potential bidders for the collateral, even though it has gone through a valid auction process and the auction limit is already the lowest. “The Petitioner’s right right to take over bad-credit customers’ collateral through auction has been restricted. This has resulted in the Petitioner not being able to take over the collateral," he said.
Made also said while Article 12A paragraph (1) of the Banking Law doesn’t explicitly prohibits rural banks to take over bad-credit customers’ collateral through auction, the interpretation of the DJKN 2012 letter that discriminates rural banks have caused irregularity among implementing regulations of Law No. 10 of 1998. He added that the Petitioner filed the petition in order to obtain the Court’s interpretation. He said if the DJKN 2012 letter doesn’t apply, there will be uniformity among the 1945 Constitution, the Banking Law, and the regulations of the Financial Services Authority (POJK)—the agency overseeing commercial and rural banks.
Therefore, in the petitum, Made requested that the Court declare the phrase “Commercial Banks” in Article 12A paragraph (1) of the Banking Law in violation of Article 1 paragraph (3), Article 27 paragraph (1), Article 28D paragraph (1), Article 28H paragraph (2), Article 28I paragraph (2), and Article 33 paragraph (4) of the 1945 Constitution, insofar as not interpreted as “commercial and rural banks.” He requested that the a quo article be interpreted as “both commercial and rural banks may purchase Collateral, whether in whole or in part, either through auction or outside auction according to willful submission by the owner of the Collateral or according to power of attorney by the owner of the collateral to sale outside auction in the event that a Debtor Customer fail to meet their obligations to the Bank, provided that the purchased Collateral be cashed in at the earliest opportunity.”
Justices’ Advice
Constitutional Justice Suhartoyo advised the Petitioner to clarify his constitutional right. “The impairment to the constitutional right must be clear, whether personally or representing BPR Lestari legal entity,” he said. Meanwhile, Constitutional Justice Arief Hidayat asked the Petitioner to elaborate each of the touchstones and their contradiction to the a quo article. He also asked that the petitum be simplified. Similarly, Constitutional Justice Enny Nurbaningsih asked the Petitioner to build his argument on the constitutional loss.
Before concluding the hearing, Justice Saldi stated that the Petitioner was given 14 work days to revise the petition and submit it by Wednesday, December 9, 2020 at 14:00 WIB.
Writer: Utami Argawati
Editor: Lulu Anjarsari.
PR: Andhini S. F.
Translator: Yuniar Widiastuti (NL)
Translation uploaded on 11/30/2020 18:24 WIB
Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian version, the Indonesian version will prevail.