Legal Aspects of the Use of the Purchase and Assumption Method in the Resolution of Failing Banks in Indonesia

Abstract

This article examines the handling of failed banks through the purchase and assumption method as regulated by Law No. 9 of 2016 concerning the Prevention and Resolution of Financial System Crises. This method involves transferring the assets and liabilities of a failed bank to a receiving bank, either with or without the knowledge of the depositors. The primary focus is on the legal protection of depositors concerning the transfer of assets and liabilities without prior notification. The research employs a normative legal method using secondary data from official documents, books, and related studies, along with qualitative analysis. The findings indicate that the purchase and assumption method, implemented by the Deposit Insurance Corporation (LPS), safeguards depositors and maintains public trust in the banking system, while mitigating the systemic impact of bank failures.