Private Bank Definition, Types, And Examples In Indonesia

ACTIVELY SHARE — Private banks are financial institutions whose capital comes from private parties.

In Indonesia, there are many financial institutions that provide services to make it easier for you to carry out various financial activities.

In addition to government-owned financial institutions, private banks are facilities that are here to help your banking activities. What is the difference?

The main difference between state banks and private banks is the source of capital. Well, this time Actively Share will bring you to know more about private banks and all the important aspects in them.

Definition of Private Bank

Private banks are banks whose capital and activities are carried out by private parties. Part or all of the ownership of private banks is managed by entrepreneurs with Indonesian citizenship status or leaders of a legal entity.

Therefore, the profits obtained by private banks belong to the private sector, not the government.

In terms of business activities, private banks are not so different from state banks. Private banks continue to serve various banking services in general, such as:

  • Funding_
  • Lending (borrowing funds)
  • Services (service to customers)

Private banks in Indonesia are easier to find in various regions compared to state banks. The amount is more than state-owned banks. However, the management of private banks is still regulated by the legal regulations that bind them.

Based on the Law of the Republic of Indonesia Number 14 of 1967 concerning Banking Principals, non-SOE bank activities may only be carried out after obtaining permission from the Minister of Finance with consideration from Bank Indonesia.

Difference Between Private Bank and Government Bank

Judging from the definition of private banks, the capital and ownership are different from state banks. Private banks are banks established by private parties, such as entrepreneurs and owners of legal entities. The profits obtained by private banks belong to the shareholders and managers.

Trending in Banking and Finance

Leave a Comment