The concept of the business judgement rule essentially provides legal\nprotection to banks for business decisions taken in good faith, based on\nthe principle of prudence, without conflicts of interest, and for the\nbest interests of the company.<\/p>\n
Jakarta (ANTARA) - The Financial Services Authority (OJK) views that\nbanking industry players require legal certainty in handling\nnon-performing loans to support healthy and sustainable credit\ngrowth.<\/p>\n
To that end, OJK considers it important to have a common\nunderstanding among all stakeholders regarding the application of the\nbusiness judgement rule in handling criminal cases in the banking\nsector.<\/p>\n
\u201cThe concept of the business judgement rule essentially provides\nlegal protection to the bank for business decisions taken in good faith,\nbased on the principle of prudence, without conflicts of interest, and\ncarried out for the best interests of the company,\u201d said the Executive\nHead of Banking Supervision at OJK, Dian Ediana Rae, in a statement\nreceived in Jakarta on Wednesday.<\/p>\n
She emphasised the importance of building a conducive climate for the\nbanking industry through strengthened regulations, supervision, and law\nenforcement that are aligned.<\/p>\n
Furthermore, Dian also expressed hope for a stronger common\nunderstanding between regulators, law enforcement officials, academics,\nand banking industry players regarding the application of the business\njudgement rule in the banking sector.<\/p>\n
On Tuesday (12\/5), OJK held the Banking Industry Seminar with the\ntheme \u201cApplication of the Business Judgement Rule to Non-Performing\nLoans in Banks\u201d.<\/p>\n
Through this forum, OJK hopes that the banking industry will\nincreasingly understand that the business judgement rule can provide\nprotection in making business decisions, including the process of\ngranting credit and financing, as long as it is carried out in\naccordance with the principle of prudence and applicable laws and\nregulations.<\/p>\n
She explained that the business judgement rule can be applied as long\nas the cumulative requirements stipulated in Article 97 paragraph (5) of\nLaw No.\u00a040 of 2007 on Limited Liability Companies are met.<\/p>\n
Those requirements include the execution of the decision in good\nfaith, compliance with proper procedures, absence of conflicts of\ninterest, and maximum efforts in mitigating the risk of loss.<\/p>\n
If all those parameters are met but losses still occur, including the\nrisk of non-performing loans, then it constitutes a business failure and\nnot a criminal act, especially if influenced by external factors beyond\nthe bank\u2019s control.<\/p>\n
In addition, she stressed the importance of prioritising the ultimum\nremedium principle, which states that the criminal route should be the\nlast resort in resolving banking issues that have met the elements of\ngood corporate governance.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/ojk-legal-certainty-needed-for-bankers-in-handling-non-performing-loans-1778684063", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }