According to Law No. 10 of 1998 dated 10 November 1998 on Banking, which meant the bank was "a business entity which collects funds from the public in the form of savings and channel them to the community in the form of credit and / or other forms in order to improve the living standard many people".
Based on the above understanding, the bank is a company engaged in the financial sector, meaning that banking activities are always associated in the field of finance.
Principle, Function, and Purpose of the Indonesian Banking
Under Law No. 10 of 1998 on Banking, Indonesian banks in conducting their business is based on economic democracy by using the principle of prudence. Economic Democracy itself is carried out based on Pancasila and 1945 Constitution.
Based on the principle used in banking, the goal is to support the implementation of Indonesia's banking national development in order to improve the distribution of development and hasilhasilnya, economic growth and national stability towards improving the welfare of the people.
Under Law no. 10 of 1998, the function of banks in Indonesia are:
a. As a place to collect funds from the Bank in charge of securing the money savings and time deposits and deposits in a checking account or current account.
The function of the bank's main function.
b. As a supplier of funds or bank lenders provide loans for people in need, especially for productive efforts.