Settlement of Bad Loans with Guarantee of Dependent Rights at Banks and Auction Houses Based on the Law on Dependent Rights No.4 of 1996 (Case Study: Decision No.550/Pdt/2019/PT MDN)

Abstract

The interaction between economic development and the banking sector, particularly in the provision of credit, is crucial, with the resolution of non-performing loans (NPLs) being a significant issue. This study, titled "Resolution of Non-Performing Loans with Collateral Rights in Banks and Auction Houses," aims to investigate the mechanisms for resolving NPLs through the execution of collateral rights as stipulated by Law No. 4 of 1996. Utilizing Verdict No. 550/Pdt/2019/PT MDN as a case study, the research employs normative and legal analysis methods to explore the implementation of collateral rights in the auctioning of collateral assets when debtors default on their loans. The findings reveal the legal procedures and effectiveness of collateral execution in mitigating NPLs. The study concludes that the proper application of collateral rights laws can significantly aid in resolving NPLs, with implications for improving banking sector stability and credit recovery processes.