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Strategy of Rural Bank in the economy plummeted because of Covid-19
25/06/2020 Views : 222
I Wayan Sudirman
In the operation of a bank, OJK has been conducting regular checks since 2011 and banks must be aware of the results of audits with poor results and banks should fix them. For example, the Allowance for Earning Assets or PPAP is found to be too low, so it is recommended that PPAP needs to be increased to 300% of the existing PPAP because it is based on a calculation that is associated with the number of non-current loans. OJK also said that the board of directors violated the bank's prudence, and the bank's board of directors was asked by the authorities to sign an acknowledgment of an error and agreed to take corrective actions on improper banking practices. Violations and errors that result in bank losses. With bank losses in a certain year, bank capital becomes decreased for example below the existing capital and even becomes below the minimum capital allowed by regulations. Even though there is an incident that is bank losses that erode capital, not a few shareholders of the bank behave indifferently and no one is willing to add capital with cash. The attitude of shareholders like this happens, maybe the shareholders know that the bank is losing money because the directors work is not right. Finally, the bank's board of commissioners took a firm initiative on certain efforts that had to be taken so that the bank would not lose money, because if left unchecked, the bank's tendency would fall into trouble. It was marked by the number of non-current loans so that bank income decreased behind expenses or bank fees that continued to increase. It is also known that the increase in non-current credit occurs because the ability to repay from the debtor is non-existent or low behind the debtor given a large credit by the board of directors and the sector financed is a sector that is not growing even the declining sector and the board of directors flirt with prospective borrowers to ask for fees for credit channeled. The board of commissioners is also annoyed because a bad debtor wants to sue the bank. The board of commissioners also agreed to find buyers for collateral land that had been taken over but not yet sold. The bank's profit has decreased compared to the previous year and the decline is a challenge for the board of directors. Most of the bank's board of commissioners did not tell what happened and was not revealed at the general meeting of shareholders as a problem. The board of directors often does not believe that one day such a bank will collapse. The mistrust went on as if the board of directors were brave. We know that in general, brave souls arise because they do not know the bank properly. Are there any directors' lives in some banks? Especially if they are praised by the FSA?
The board of commissioners and the board of directors certainly felt a serious problem in the short term. It is hard because banks suffer losses, bank capital is eroded by losses, bank shareholders do not want to increase capital with cash because shareholders know that the performance of their directors is incorrect. Even more severe, in such circumstances there is a provision that in the next 4 years for example the minimum core bank capital must be a certain amount, for example a minimum of Rp.6,000,000,000.00 in 2024 for BPRs where currently the new capital is Rp.3,000,000,000, 00 The shareholders still do not want to increase capital with cash because of bad directors' behavior, so banks suffer losses behind the rules of the FSA that does not allow shareholders to become board of directors because of certain requirements in terms of percentage of ownership. With such constraints and situations, perhaps the only way taken by the OJK is to invite investors to increase the bank capital that has been eroded so that in the long term the bank's growth is quite promising before there is a solution to join or be sold and dismiss the existing board of directors that is not good.
Each quarter banks often calculate their health level, for example obtained the soundness of the bank from the Camel component: CAR = 36% (healthy), KAP (APYD / AP) = 13.54% (quite healthy), KAP (PPAP / PPAPWD ) = 0.54% (healthy), Management = 99 score (healthy), Earning (ROA) = 1.21% (healthy enough), (BOPO = 75% (healthy), and Liquidity (Cash Ratio) = 40 , 18% (healthy), (LDR) = 62.18% (healthy) Overall, this BPR is healthy and there are no vacant positions, recruitment of new workers is done selectively, education and training according to needs, carried out credit problem resolution bad loans, the repossessed program has been carried out because of bad loans, improvement of credit analysis continues to be carried out with the completeness and others.
In a normal economic situation, the soundness of the bank above is acceptable, but in an abnormal situation for example there is an economic downturn as it is now due to Covid-19, health
The board of commissioners and the board of directors certainly felt a serious problem in the short term. It is hard because banks suffer losses, bank capital is eroded by losses, bank shareholders do not want to increase capital with cash because shareholders know that the performance of their directors is incorrect. Even more severe, in such circumstances there is a provision that in the next 4 years for example the minimum core bank capital must be a certain amount, for example a minimum of Rp.6,000,000,000.00 in 2024 for BPRs where currently the new capital is Rp.3,000,000,000, 00 The shareholders still do not want to increase capital with cash because of bad directors' behavior, so banks suffer losses behind the rules of the FSA that does not allow shareholders to become board of directors because of certain requirements in terms of percentage of ownership. With such constraints and situations, perhaps the only way taken by the OJK is to invite investors to increase the bank capital that has been eroded so that in the long term the bank's growth is quite promising before there is a solution to join or be sold and dismiss the existing board of directors that is not good.
Each quarter banks often calculate their health level, for example obtained the soundness of the bank from the Camel component: CAR = 36% (healthy), KAP (APYD / AP) = 13.54% (quite healthy), KAP (PPAP / PPAPWD ) = 0.54% (healthy), Management = 99 score (healthy), Earning (ROA) = 1.21% (healthy enough), (BOPO = 75% (healthy), and Liquidity (Cash Ratio) = 40 , 18% (healthy), (LDR) = 62.18% (healthy) Overall, this BPR is healthy and there are no vacant positions, recruitment of new workers is done selectively, education and training according to needs, carried out credit problem resolution bad loans, the repossessed program has been carried out because of bad loans, improvement of credit analysis continues to be carried out with the completeness and others.
In a normal economic situation, the soundness of the bank above is acceptable, but in an abnormal situation for example there is an economic downturn as it is now due to Covid-19, health