Article 2 and Article 8 of Law Number 10 of 1998 concerning Amendments
to Law Number 7 of 1992 concerning Banking stipulate that Indonesian Banking
must apply the prudential relationship in conducting its business. The relationship
of prudence is realized when banks carry out standard operational procedures as
banks have the authority to make standard operational procedures based on the
Financial Services Authority Regulation Number 18/POJK.03/2016 concerning
Implementation of Risk Management for Commercial Banks Article 2In providing
credit or financing, Commercial Banks must have confidence based on in-depth
analysis or the intention and ability of the Debtor Customer to pay off his debt or
return the said financing in accordance with what was agreed. However, in
practice, banks often experience Non Perfoming Loan and are unable to obtain
their rights. The formulation of the problem is what is juridical factor that prevent
banks from getting what they are entitled to from the perspective of the prudential
relationship? Author use normative legal research method in this study. Result of
this study is that bank based on the case didn’t apply prudential relationship and
standart operational procedure inadequate as stipulated on legislations that
regulate bank is conducting their business must apply the prudential relationship.