Jakarta, CNBC Indonesia \u2014 Coordinating Minister for Legal Affairs,\nHuman Rights, Immigration and Corrections Yusril Ihza Mahendra has\nhighlighted the issue of non-performing loans at state-owned banks,\nwhich could potentially be classified as criminal corruption.<\/p>\n
The government is currently discussing revisions to the Corruption\nEradication Law, including how to clarify the boundary between business\nlosses and state financial losses that meet the criteria for a\ncorruption offence.<\/p>\n
Yusril said one issue requiring review in the law is the broad\ninterpretation of Articles 2 and 3, particularly their provisions on\nlosses to state finances and the national economy.<\/p>\n
The two articles are central to prosecuting corruption. However,\nYusril said their broad scope could result in various matters involving\nstate losses being classified as corruption.<\/p>\n
\u201cThe central element of a corruption offence is enriching oneself,\nanother person or a corporation unlawfully, with the consequence of\ncausing losses to state finances and the national economy,\u201d Yusril said\nat a press conference after meeting National Economic Council (DEN)\nchairman Luhut Binsar Pandjaitan to discuss a review of the law, at the\nDEN office on Tuesday (27 October 2026).<\/p>\n
He stressed that the discussions were not intended to remove state\nfinancial losses as an element of corruption offences. Rather, the\ngovernment wants to clarify what constitutes a state financial loss and\nthe definition of state finances used in law enforcement.<\/p>\n
Yusril said that several laws currently define state finances,\nincluding the laws governing the Audit Board of Indonesia (BPK) and the\nState Treasury.<\/p>\n
He said these differing definitions need to be clarified to ensure\nlegal certainty and prevent divergent interpretations.<\/p>\n
\u201cIf there are too many definitions of state finances, which one\nshould be used and applied? People may pick and choose whichever is\neasier or quicker to implement. Therefore, for the sake of legal\ncertainty in our country, we need to make the meaning of state finances\nclearer,\u201d he said.<\/p>\n
Yusril cited bank lending as an example. A loan may initially be\ngranted after an in-depth feasibility assessment, but later become\nnon-performing because of unforeseen circumstances.<\/p>\n
He referred to economic changes such as the Covid-19 pandemic, which\nleft borrowers unable to repay their loans. In such circumstances, he\nsaid, losses incurred by a bank, including a state-owned bank, should be\ndistinguished from losses arising from corruption.<\/p>\n
\u201cAn in-depth assessment is carried out first, and the loan is granted\nas feasible and reasonable. Then, along the way, unforeseen things\nhappen. Perhaps, as during Covid, or because of other events, the\nborrower defaults and cannot repay the loan,\u201d Yusril said.<\/p>\n
He compared this approach with practices in other countries, where\nlosses from bad loans may be treated as business risks as long as no\ncriminal element is found.<\/p>\n
By contrast, if there is collusion or malicious intent between bank\nofficials and the borrower, the conduct can still be prosecuted under\nthe criminal offence that applies.<\/p>\n
\u201cEven if there is a crime, collusion or malicious intent between\nthose approving the loan and the recipient\u2014or collusion between bank\nstaff and the borrower\u2014that constitutes a separate criminal offence, not\ncorruption,\u201d he said.<\/p>\n
The proposed clarification of the law is intended to distinguish\nbusiness decisions that result in losses from conduct that contains\ncriminal elements. Yusril did not say, however, that all bad loans at\nstate-owned enterprises would be excluded from corruption cases.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/can-bad-loans-at-state-owned-banks-lead-to-corruption-cases-yusril-explains-1793094701", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }