Banks as intermediary institutions have the authority to collect funds from the public
and channel them back to the community in the form of lending. Lending is
considered full of risks, so lending must include collateral. Providing credit
collateral gives the debtor the confidence and ability to pay off his debts according
to what was agreed. As the first creditor, the bank is given the right to sell collateral
that is under its authority if the debtor cannot pay it off as agreed, while the bank
has difficulty selling collateral to fulfill debt payments because the collateral object
in question is in dispute. Therefore, the purpose of this study is to find out what
juridical factors cause banks to be unable to execute debt guarantees on credit
agreements with bad credit quality. This legal research uses normative legal
analysis based on case studies at Bank BNI Yogyakarta Branch, so this research
uses secondary data. The results of this study are what juridical factors cause banks
to be unable to execute debt guarantees in credit agreements with bad credit quality
contained in the provisions in the Priority Principle, and Article 6 of the Mortgage
Law which in practice conflicts with the provisions in Article 27 paragraph (1) )
PMK Number 213 of 2020 Concerning Instructions for Conducting Auctions