Protecting whose interests?

Protecting whose interests?

In 1992's Banking Law No.7, Article 40 states that banks are prohibited from divulging the financial records of their clients and stipulates that all client information should be kept confidential in compliance with common banking practice.

Considering the general nature of the content of this article, it is only natural that different interpretations should arise. Banking authorities and bank administrators prefer to take the view that this secrecy should cover all depositors and debtors, even though this could be used as a screen to hide violations.

On the other side, some prefer to take the view that this secrecy should cover certain clients only. If the client in question is a one with bad debts, secrecy should not be required as such clients could cause the bank to go bankrupt. On such occasions, it is the public who will be duped.

In view of all this, a balance is called for between the principles of bank disclosure and bank secrecy. Such a balance should be struck carefully. The disclosures should not open opportunities for abuse of information, which could, for instance be motivated in an attempt to damage a business competitor. On the other hand, information should not be kept so secret that collusion is discovered only after a bank is on the brink of bankruptcy.

-- Republika, Jakarta