Risk Management of Indonesian Banking in Fraud Prevention

Abstract

Fraud based on the provisions of the Circular Letter of Bank Indonesia Number 13/28/DPNP issued on December 9, 2011 is an act of deviation or omission that is intentionally carried out to manipulate banks, customers, or other parties, which occurs within the bank and/or uses bank facilities, resulting in losses and fraud perpetrators gaining profits directly or indirectly. Fraud control efforts are important in supporting the achievement of healthy banking activities. The legal issues described in this paper discuss how risk management should be applied by national banks in preventing and overcoming fraud. The problem with this is how risk management should be applied by national banks in preventing and tackling fraud. The results of the discussion of this paper classify the legal provisions related to the prevention and handling of fraud, and produce an output in the form of an analysis that can be applied as a policy (operational standard) of banking risk management in minimizing fraud in accordance with the times and remains in the realm of the study of Pancasila Law in the banking context. The conclusion of this paper is to determine the risk management description model as an important and strategic factor in handling fraud which consists of objectives, risk identification, determination of size, analysis techniques, implementation, and evaluation.