Banking services is very important in the economic development of a country. Banking services are generally divided into two goals. First, as a provider payment mechanisms and tools are efficient for customers. For this, the bank provides cash, savings, and credit cards. This is the most important role of banks in the economic. Without providing an efficient means of payment, then goods can only be traded by barter that takes time.
Second, by accepting savings from customers and lend it to those who need funds, means that banks increase the flow and utilization of funds for investment in more productive. If this role is going well, the economy of a country will increase. Without the flow of funds, the money just sitting in someone’s pocket, one can not obtain a loan and the business can not be built because they do not have a loan.
Bank Types and Definitions
Generally, a bank is a business entity that has the authority and functions for the general public to raise funds for distribution to those who need funds. Below are all sorts and types of banks in Indonesia and its meaning definition / meaning of each bank.
Types of Bank:
1. Central Bank
The central bank is a bank incorporated under Law No. 13 of 1968 which has the duty to regulate the circulation of money, regulate mobilization of funds, regulate banks, credit manage, maintain currency stability, filed a printing / additions rupiah and others. The central bank there is only one at the center of all banks in Indonesia.
Public Bank is a financial institution offering a variety of products and services to the community with a function such as collect funds directly from the public in a variety of forms, giving credit to the people who need loans, buying and selling foreign currency / exchange, sell insurance, current accounts, services checks, valuables receiving care, and so forth.
3. Rural Bank / BPR
Rural Bank is supporting the bank has limited operational area and funds owned by a limited service as well as give credit loans with a limited amount, accept public deposits, provide financing to the principle of profit sharing, the placement of funds in a bank certificate of Indonesia, deposits , certificates / securities, savings, and so forth.
Since the enactment of Law No. 10 of 1998, types of banks can be divided into commercial banks and rural banks.
Commercial Bank is a bank conducting conventional business and or based on sharia principles in their activities providing services in payment traffic. The nature of the services rendered is common. Banks often also called the Commercial Bank. Ongoing work of the main banks include:
a. collect funds from the public in the form of demand deposits, time deposits, certificates of deposits, savings deposits;
b. give credit;
c. issue an acknowledgment of debt;
d. moving money;
e. placing funds on or lend funds from other banks;
f. receive payment of the bill on securities;
g. provides a place to store goods and securities.
Commercial bank in Indonesia in terms of ownership consists of:
a. State banks, such as BRI, BNI, BTN.
b. Regional Development Bank (BPD), such as BPD Jakarta.
c. National Private Bank Foreign Exchange, such as BCA, NISP, Bank Danamon.
d. Not National Private Bank Foreign Exchange.
e. Mixed Bank, Commerce Bank Sumitomo example.
f. Foreign banks, such as Bank of America, Bank of Tokyo.
Public Bank was called Exchange Bank and Non-Bank Foreign Exchange:
– Banks Foreign Exchange means that the scope of the motion to overseas operations.
– Non Commercial Bank Foreign Exchange means the scope of its operations in the domestic movement alone.
2. Rural banks (BPR)
According to Law No. 7 of 1992 on Banking, Rural Bank is a bank that receives deposits only in the form of time deposits, savings or other similar forms with it.
Efforts Rural Bank, among others:
1. collect funds from the public in the form of savings in the form of time deposits, and savings;
2. give credit;
3. provide financing for customers based on the principle of profit-sharing in accordance with established governments, and
4. placing funds in Bank Indonesia certificates (SBI)
The division is based bank other than the Banking Law may also be divided according to the bank’s ability to create the means of payment, which includes:
1. Primary Bank is a bank that can create the means of payment in the form of currency outside banks and demand deposits. Banks are included in this group are:
a. Central Bank or Bank Indonesia as the creator of the currency. Besides the task of the Central Bank are:
– Formulate and implement monetary policy;
– Manage and maintain the payment system, and
– Regulate and supervise banks.
b. Banks as the creator of demand deposits (money that is specifically applicable only and is not valid in general).
2. Secondary Bank is a bank that can not create the means of payment and only act as intermediaries in the credit belonging to the bank this is a Rural Bank.