Abstract
Mount Agung eruptions have an impact on economic losses, especially the banking sector in Bali. Entrepreneurs and bank debtors, especially in Karangasem Regency and its surroundings, ask for relief from the implementation of the provisions of their credit agreements in terms of time, interest and also obligations performance. It is a legal research that focuses on analyzing the utilitarian approach used by the Indonesian Financial Services Authority (Otoritas Jasa Keuangan/OJK) in the form of Banking-relaxation policy in supporting the local society who affected by natural disaster. It has been concluded that local society who affected by the eruption of Mount Agung in Karangasem Regency Bali may use ‘force majeure’ to suspend their obligation performance in any economic matters, including loan banking. In addressing this issue, OJK plays a role by issuing financial policy for the 3 years period that is expected to give a margin of appreciation for local society to re-arrange their economic situation after the disaster. Such policy, seems has not properly been implemented by all banks in related area. Therefore, a utilitarian approach that inspired the OJK financial relaxation policy should be improved by taking into consideration the concerns on cultural-economic issues, the real declining and uncertain situation of the local economy, and the fragile tourism industry in Karangasem regency.
Highlights
For the last three years, Mount Agung volcano eruptions have an impact on economic losses, especially the banking sector in Bali
This article is begun by discussing a basic legal notion on ‘force majeure’ that is generally associated with the common understanding of not imposing a strict performance of a contractual obligation under private laws in case of unforeseen and unexpected situation, in this case a natural disaster, that might have an impact to debtor
There is a common understanding that the inability of the debtor to pay their loans due to earthquakes, flash floods, and the presence of lava/eruption of Mount Agung should be connected to the concept of force majeure
Summary
For the last three years, Mount Agung volcano eruptions have an impact on economic losses, especially the banking sector in Bali. Responding to the economic situation, the Karangasem Regency Government officially requested the Financial Services Authority to provide relaxation for banking customers who had difficulty to pay their loan because of the eruptions of Mount Agung. This article is begun by discussing a basic legal notion on ‘force majeure’ (overmacht) that is generally associated with the common understanding of not imposing a strict performance of a contractual obligation under private laws in case of unforeseen and unexpected situation, in this case a natural disaster, that might have an impact to debtor It continues with a general description of how OJK plays a role in addressing Natural disaster. Addresses inequities in the apportionment of losses that arise when traditional rules of consumer finance are applied to enforce payment obligations that accrue during and after catastrophes and explores the contracts and debt obligations of those who would be affected in another disaster of similar or even greater magnitude and duration and suggests a reform that could ameliorate foreseeable consumer finance difficulties in a manner consistent with contemporary approaches to consumer protection.
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