Implementation Of Legal Lending Limits for Commercial Bank Credit as A Form of Implementation of Prudential Principles

Abstract

This research aims to find out how the Legal Lending Limit (LLL) is implemented for commercial banks. The method used in this research is a normative legal research method using a statutory approach. The research results show that the application of the Legal Lending Limit (LLL) is a form of application of the precautionary principle where regulations regarding LLL aim to minimize credit risks that may occur. If there is a violation or exceedance of the LLL, it must be handled immediately by making an action report and the bank must resolve the violation or exceedance of the LLL in accordance with the action plan within a predetermined time limit. The impact of violations or exceeding the LLL that are not resolved means that the person responsible for a bank can be subject to sanctions in the form of administrative sanctions and criminal sanctions, apart from that it can also have an impact on the continuity of the bank's existence if a credit failure occurs.