Beneficiary of Resolution Bank by Indonesia Deposit Insurance Corporation (LPS)

Abstract

As an intermediary institution that functions to mobilize public funds, the bank has           its potential to experience failure or fraud which can cause ad decline in the soundness of the          bank (through CAMEL; Capital, Assets, Management, Earnings, and Liquidity). The Deposit    Insurance Corporation was formed to guarantee limited deposit funds (limited guarantee) as             a substitute for a blanket guarantee. LPS also has an active role in maintaining the stability       of the banking system in accordance with its authority where after the OJK declares a failed              bank, the banks is handed over to LPS, for non-systemic failed banks, a settlement is carried            out by a rescue (at the expense of the shareholders) and not perform a rescue (liquidate the             failed bank). If the bank failes having a systemic impact, the IDIC (LPS) will take care of the          Systemic Failed Bank placing a temporary capital placement (PMS) to make it sound and                 resale it within 3 years. The issue is: How does failing bank restructuring meets the principle            of benefit by the Indonesia Deposit Insurance Corporation ? Type of this research is juridical-       normative research and legal materials tracebility technique using qualitative analytical. This     research approach using statute approach, conceptual approach, and historical approach.   Conclusion of this paper is Resolution Bank or restructuring of failed bank by LPS that meets        the beneficiary principle must carry out the following the four (4) categories of Commercial         Banks Based on Business Activities (BUKU), where for category 3 and 4, a long period of                 restructuring is required because the bank has many derivative products.