CHAPTER I
PRELIMINARY
1.Financial Institutions and Banking
PRELIMINARY
1.Financial Institutions and Banking
Definition of Financial Institution is a company engaged in the financial sector. This activity is finance capital a business field, in addition to other businesses such as collecting money from masyararakat that excess money or have not been used by its owner.
Etymologically bank comes from the Italian word banco, which means the bench. Banku is what is used by bankers to serve its operations to its customers. Financial institutions, namely Bank Financial Institutions that provide the most comprehensive services, because besides Bank may act as a collector of funds is also channeling funds. According to Law No. 10 of 1998 Law on banking article 1, paragraph 2 is defined as follows:
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 credit or other forms in order to improve the living standards of the people.
Understanding Banking is everything that concerns about the bank, including institutional, business activities, as well as the manner and process of carrying out its business activities.
Etymologically bank comes from the Italian word banco, which means the bench. Banku is what is used by bankers to serve its operations to its customers. Financial institutions, namely Bank Financial Institutions that provide the most comprehensive services, because besides Bank may act as a collector of funds is also channeling funds. According to Law No. 10 of 1998 Law on banking article 1, paragraph 2 is defined as follows:
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 credit or other forms in order to improve the living standards of the people.
Understanding Banking is everything that concerns about the bank, including institutional, business activities, as well as the manner and process of carrying out its business activities.
CHAPTER II
DISCUSSION
DISCUSSION
2. TYPES OF BANKING INSTITUTIONS
2.1 Financial Institutions Bank In terms of function
a) the Central Bank (Central Bank) in this case is Bank Indonesia (BI) as a circulation bank, bank to bank and lender of last resort. Responsible for managing, coordinating, supervising and providing measures in the banking sector. Thus BI is not served as Commercial Bank, which directly deal with the public. BI dealing directly with commercial banks.
b) Commercial Bank (Commercial Bank), which is in charge of serving the entire bank banking services and serve all levels of society, both individuals and institutions.
c) Bank Savings (Savings Bank) is a bank that accepts deposits in the collection of funds in savings and in its efforts primarily invest funds in commercial paper.
d) Development Bank (Development Bank) is a bank that in its efforts to receive savings in the form of deposit and commercial paper issued medium and long term as well as provide medium and long-term credit in the field of development.
e) rural banks (BPR) is a bank that specializes in serving small communities in some districts and Rural. Rural Bank comes from the village bank, Bank Markets, Village Office, bank clerks and other banks that later merged into the People's Bank Perkereditan. Types of products offered by BPR is relatively small when compared with the commercial banks, even some types of bank services should not be held by the RB as a Demand Deposit Account Opening and join the clearing. (Cashmere, Banks and Other Financial Institutions, page 4)
f) Bank Employees and Other Bank
2.2 Financial Institutions Bank In terms of Ownership
a) State-Owned Banks,
Government-Owned Bank
The point is: Neither the deed and its capital is owned by the government in this regard State, so that the entire profit of the bank is owned by the state.
Example: Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI), the State Savings Bank (BTN), Development Bank of Indonesia (Bapindo) ,, and others.
Local government-owned bank
The point is that State banks located in each area of level 1 and 2 in the respective provinces.
Example: Bank DKI, North Sulawesi Bank, Bank of Papua.
b) Private Owned Banks
Private-owned banks can be divided into three kinds:
1. Banks National Private Owned, ie banks wholly owned Indonesian citizens or legal entities are participants and leaders consisting of Indonesian citizens. The establishment of privately-owned banks established by decree Men. Keu. No. Kep / 603 / M / IV / 12/1968 dated 18-12-1968.
Privately-owned banks can take the form:
a) Private Banks
b) Private Savings Bank
c) Development Bank Private
Privately-owned banks have joined the organization called the National Association of Private Banks (Banks Association) which was established since 1953. Some of the private national banks has been designated as a foreign exchange bank.
c) Banks Private Owned Foreign
Banks are foreign-owned private banks which is wholly owned by a foreign citizen or legal entities that participants and their leadership consists of foreign nationals. This bank was established by decree Men. Keu. No. 034 / MK / IV / 2/1968 dated 20-2-1968. Private banks are foreign-owned may consist of:
a) Foreign Commercial Banks
b) Foreign Development Bank
c) Foreign Savings Bank
But that is now being operated in Indonesia (Jakarta) is a foreign commercial bank. Foreign banks to open branch offices in Jakarta consists of:
(1) Bank of the United States:
a) State-Owned Banks,
Government-Owned Bank
The point is: Neither the deed and its capital is owned by the government in this regard State, so that the entire profit of the bank is owned by the state.
Example: Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI), the State Savings Bank (BTN), Development Bank of Indonesia (Bapindo) ,, and others.
Local government-owned bank
The point is that State banks located in each area of level 1 and 2 in the respective provinces.
Example: Bank DKI, North Sulawesi Bank, Bank of Papua.
b) Private Owned Banks
Private-owned banks can be divided into three kinds:
1. Banks National Private Owned, ie banks wholly owned Indonesian citizens or legal entities are participants and leaders consisting of Indonesian citizens. The establishment of privately-owned banks established by decree Men. Keu. No. Kep / 603 / M / IV / 12/1968 dated 18-12-1968.
Privately-owned banks can take the form:
a) Private Banks
b) Private Savings Bank
c) Development Bank Private
Privately-owned banks have joined the organization called the National Association of Private Banks (Banks Association) which was established since 1953. Some of the private national banks has been designated as a foreign exchange bank.
c) Banks Private Owned Foreign
Banks are foreign-owned private banks which is wholly owned by a foreign citizen or legal entities that participants and their leadership consists of foreign nationals. This bank was established by decree Men. Keu. No. 034 / MK / IV / 2/1968 dated 20-2-1968. Private banks are foreign-owned may consist of:
a) Foreign Commercial Banks
b) Foreign Development Bank
c) Foreign Savings Bank
But that is now being operated in Indonesia (Jakarta) is a foreign commercial bank. Foreign banks to open branch offices in Jakarta consists of:
(1) Bank of the United States:
• Bank of America
• City Bank
• American Express
• Chase Manhattan Bank
(2) The Bank of England, Standard Chartered Bank
(3) Bank of Europe, European Asian Bank
(4) The Bank of Japan, Bank of Tokyo
(5) Bank of China, Hong Kong and Shanghai Banking Corporation
(6) Bank of the Netherlands, the Algemene Bank Nederland
(7) Bank of Thailand, Bangkok Bank
d). Bank Owned Cooperative
The point is that the Bank where the whole ownership of its shares are owned by a company incorporated under the laws of the cooperative.
Example: Cooperative Commercial Bank Indonesia ..
e). Banks Mixed
The point is the ownership of shares owned by private merging national and foreign private sector, but a majority share of national private ownership because domiciled in Indonesia.
• City Bank
• American Express
• Chase Manhattan Bank
(2) The Bank of England, Standard Chartered Bank
(3) Bank of Europe, European Asian Bank
(4) The Bank of Japan, Bank of Tokyo
(5) Bank of China, Hong Kong and Shanghai Banking Corporation
(6) Bank of the Netherlands, the Algemene Bank Nederland
(7) Bank of Thailand, Bangkok Bank
d). Bank Owned Cooperative
The point is that the Bank where the whole ownership of its shares are owned by a company incorporated under the laws of the cooperative.
Example: Cooperative Commercial Bank Indonesia ..
e). Banks Mixed
The point is the ownership of shares owned by private merging national and foreign private sector, but a majority share of national private ownership because domiciled in Indonesia.
2.3 Financial Institutions Bank In terms Status
Purpose word status or position is: based on the bank's ability to serve the public in terms of both the amount of product, capital and service quality even bank personnel. Bank in terms of its status consists of:
a) foreign exchange bank, namely Bank can carry out transactions abroad or dealing with foreign currencies as a whole, for example, carry out a transfer abroad, collection abroad, payment letter of credit (LC) and other transactions. Requirements into foreign exchange bank status is determined by Bank Indonesia
b) Non-Bank Foreign Exchange Bank is not yet able to carry out banking activities as a foreign exchange bank, in other words, a transaction carried out only domestically oriented or national basis only. This is caused because not authorized by Bank Indonesia in relation not meet the criteria / standards as a Foreign Exchange Bank.
2.4 Financial Institutions Bank In terms of the Act
Law that the subject of the reference implementation of banking activities in Indonesia is Law No.14 / 1967, subsequently converted into Law No.7 / 1992 and the latter is the Law No.10 / 1998. specifically to Bank Indonesia, the last regulated by Law No. 23/1999
According to Law No.7 / 1992 and amendments to the Law No.10 / 1998, the banks are grouped into two types, namely commercial banks and rural banks (BPR), commercial banks and rural banks can undertake usahannya conventionally or with Islamic principles.
Under the Banking Law No.7 / 1992 as amended by Law No.10 / 1998, the division of the bank that has been discussed above, which is based on the function owners and others are no longer placed in the legislation, so that the current bank pengeloompokan distinguished from legal entity.
With the provisions of the Banking Law No.7 / 1992 and Law No.10 / 1998, it appears that there are three possible forms of the same business entity for commercial banks and rural banks, the regional companies, cooperatives and limited liability companies. However, it is not possible rural banks incorporated company.
Commercial banks may perform issuance of shares on the stock exchanges in Indonesia with the provision that the bank with legal entities liability company (Persero) issuance of shares is only possible to do but did not result in change of majority ownership of shares by the state.
2.5 Financial Institutions Bank Seen from the aspect of determining the price
Pricing is meant both the selling price and the purchase price. Bank purchase by way of raising funds, while banks sell by providing credits (loans). Differentiated pricing
a) Determination Based on Principle Conventional
In the for-profit and determine the price, which is based conventional banks using two methods:
1. Setting interest rates as price, for all of its production as well as for the provision of credit. Pricing in such a uni-called "Spread-Based". If the deposit interest rate is greater than the lending rate the bank suffered a loss or what
According to Law No.7 / 1992 and amendments to the Law No.10 / 1998, the banks are grouped into two types, namely commercial banks and rural banks (BPR), commercial banks and rural banks can undertake usahannya conventionally or with Islamic principles.
Under the Banking Law No.7 / 1992 as amended by Law No.10 / 1998, the division of the bank that has been discussed above, which is based on the function owners and others are no longer placed in the legislation, so that the current bank pengeloompokan distinguished from legal entity.
With the provisions of the Banking Law No.7 / 1992 and Law No.10 / 1998, it appears that there are three possible forms of the same business entity for commercial banks and rural banks, the regional companies, cooperatives and limited liability companies. However, it is not possible rural banks incorporated company.
Commercial banks may perform issuance of shares on the stock exchanges in Indonesia with the provision that the bank with legal entities liability company (Persero) issuance of shares is only possible to do but did not result in change of majority ownership of shares by the state.
2.5 Financial Institutions Bank Seen from the aspect of determining the price
Pricing is meant both the selling price and the purchase price. Bank purchase by way of raising funds, while banks sell by providing credits (loans). Differentiated pricing
a) Determination Based on Principle Conventional
In the for-profit and determine the price, which is based conventional banks using two methods:
1. Setting interest rates as price, for all of its production as well as for the provision of credit. Pricing in such a uni-called "Spread-Based". If the deposit interest rate is greater than the lending rate the bank suffered a loss or what
known as Negative Spread. Things like this happened in 1998 to 1999
2. Establish a basic so-called "fee based". System of charging for other services marketed by the bank fee.
b) Determination of Sharia
If the bank by using a conventional system of interest as the price, because the bank with this system is based on European law, then the bank with Shariah principles based on Islamic religious law. So that in determining the price is not based on the interest rate but on the distribution of results. Thus, if a customer fails in his efforts did not obtain bank division business results. As with the system of interest, although the customer does not make a profit or not successful then the payment of interest on bank remains the obligation of borrowers.
(Cashmere, Banks and Other Financial Institutions, pp. 31-39).
2.6 Financial Institutions Bank Seen from the aspect of Goods Saved and Disbursed
There are bodies, institutions or non-bank institutions, but is often referred to as a bank. Agency, institution, or agency called the bank due to store and distribute the goods. Agency, institution, or the institution receives or holds something of society menyumbankan goods, sell or store it, and then channeled back to the communities in need.
2.7 Financial Institutions Bank Money Creation Seen from the aspect of Giral
Based on demand deposits, banks in Indonesia are grouped into two, namely:
1. Bank Primary
The primary bank is a bank that can create demand deposits. All commercial banks are banks that can create demand deposits, due to receive deposits from the public in the form of demand deposits that lets draw a check or bank draft which are demand deposits. On the other hand, commercial banks also gave credit to customers with withdrawals that can be made with the instrument demand deposits. In addition to commercial banks, the central bank is also a primary bank because the bank can issue demand deposits. Primary banks classified in:
a) Circulation Bank (the central bank) that can create credit in the form of bank notes and demand deposits
2. Establish a basic so-called "fee based". System of charging for other services marketed by the bank fee.
b) Determination of Sharia
If the bank by using a conventional system of interest as the price, because the bank with this system is based on European law, then the bank with Shariah principles based on Islamic religious law. So that in determining the price is not based on the interest rate but on the distribution of results. Thus, if a customer fails in his efforts did not obtain bank division business results. As with the system of interest, although the customer does not make a profit or not successful then the payment of interest on bank remains the obligation of borrowers.
(Cashmere, Banks and Other Financial Institutions, pp. 31-39).
2.6 Financial Institutions Bank Seen from the aspect of Goods Saved and Disbursed
There are bodies, institutions or non-bank institutions, but is often referred to as a bank. Agency, institution, or agency called the bank due to store and distribute the goods. Agency, institution, or the institution receives or holds something of society menyumbankan goods, sell or store it, and then channeled back to the communities in need.
2.7 Financial Institutions Bank Money Creation Seen from the aspect of Giral
Based on demand deposits, banks in Indonesia are grouped into two, namely:
1. Bank Primary
The primary bank is a bank that can create demand deposits. All commercial banks are banks that can create demand deposits, due to receive deposits from the public in the form of demand deposits that lets draw a check or bank draft which are demand deposits. On the other hand, commercial banks also gave credit to customers with withdrawals that can be made with the instrument demand deposits. In addition to commercial banks, the central bank is also a primary bank because the bank can issue demand deposits. Primary banks classified in:
a) Circulation Bank (the central bank) that can create credit in the form of bank notes and demand deposits
b) Commercial Bank can create demand deposits
Demand deposits by banks is conducted by way of lending is not charged on the balance (bank) customers. That is, although the bank providing credit, but the customer balances remain intact, and instead he retains the right to any withdrawal of money in the bank for insufficient balances. This can be done because the banking practice is not greater than the number of customers by creating a balance of demand deposits through checking account. Thus the currency remains the same, but the amount of demand deposits created increases.
2. Secondary Bank
Secondary bank is a bank that can not create demand deposits, just as an intermediary in the loan portfolio. Bank classified as a secondary bank among other people's credit banks, banks farmer and village banks. These banks are not allowed to participate in traffic for instance payments (transfers and clearing) and are not allowed to accept deposits in current accounts, karenaya they can not create demand deposits.
2.8 Bank According to Law No. 7 1992
In accordance with Law No. 7 of 1992 concerning Banking Chapter III, article 5, by types of banks consists of:
a) commercial banks, and
b) Bank rural.
Commercial banks can be specialized to carry out certain activities or to give greater attention to the specific activities.
With the division of the bank according to its kind, the bank division based ownership as described in 2.2 abolished.
The legal form of a commercial bank can be one of:
a) Limited Liability Company (Persero)
b) The local company
c) Cooperative
d) Limited Liability Company (PT)
While the legal form of a rural bank can be one of:
a) Local Company
Demand deposits by banks is conducted by way of lending is not charged on the balance (bank) customers. That is, although the bank providing credit, but the customer balances remain intact, and instead he retains the right to any withdrawal of money in the bank for insufficient balances. This can be done because the banking practice is not greater than the number of customers by creating a balance of demand deposits through checking account. Thus the currency remains the same, but the amount of demand deposits created increases.
2. Secondary Bank
Secondary bank is a bank that can not create demand deposits, just as an intermediary in the loan portfolio. Bank classified as a secondary bank among other people's credit banks, banks farmer and village banks. These banks are not allowed to participate in traffic for instance payments (transfers and clearing) and are not allowed to accept deposits in current accounts, karenaya they can not create demand deposits.
2.8 Bank According to Law No. 7 1992
In accordance with Law No. 7 of 1992 concerning Banking Chapter III, article 5, by types of banks consists of:
a) commercial banks, and
b) Bank rural.
Commercial banks can be specialized to carry out certain activities or to give greater attention to the specific activities.
With the division of the bank according to its kind, the bank division based ownership as described in 2.2 abolished.
The legal form of a commercial bank can be one of:
a) Limited Liability Company (Persero)
b) The local company
c) Cooperative
d) Limited Liability Company (PT)
While the legal form of a rural bank can be one of:
a) Local Company
b) Cooperative
to) Company Limited
from) other form stipulatedby government regulations.
Commercial banks can issuance of shares through the stock exchanges in Indonesia. Especially for state-owned bank, stock emissions can only be done without causing a change of the majority ownershipby the state sdaham.
to) Company Limited
from) other form stipulatedby government regulations.
Commercial banks can issuance of shares through the stock exchanges in Indonesia. Especially for state-owned bank, stock emissions can only be done without causing a change of the majority ownershipby the state sdaham.
CHAPTER III
COVER
COVER
3.1 Conclusion
The types of banking institutionsare classified according to some thinking and different views, but it can be concludedthat the types of banking institutions in addition aimed at businesses also have the same goalwhich is to the welfare of society.
3.2 Suggestions
From the above discussion of the results obtained bysome of the suggestions are:
1. Students should know about the banking institutions in order to obtain a more adequate knowledge about banking.
2. In the world of banking education lessonsshould be introduced prospectively from junior high school.
Papers Administration Finance and Banking
Compiled by:
1. Anggun
2. Derryl
3. Engga
4. Putri
5. Susi
INSTITUT BISNIS DAN ADMINISTRASI
DUTAGAMA CENDEKIA
KEDIRI
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