Bad Debt, Business Failure, or Malicious Intent? OJK Must Stay Ahead of Banks

By Eko B. Supriyanto, Chairman of Infobank Media Group

Non-performing loans in banking are not just statistics that damage portfolios. They are a red flag, a sign that something is not right in the banking ecosystem. The question is, are we being fair and honest in assessing non-performing loans at a bank, distinguishing between those that are due to business risk and those that are due to malicious intent (mens rea) or manipulation? This is because there is a tendency for law enforcement officials (APH) to be blinded by prejudice, arbitrarily naming bankers as suspects for alleged criminal acts.

Thousands of credit bankers at state-owned banks (Himbara banks), local government-owned banks (BPD), and of course rural banks (BPR) are now on edge. Especially since law enforcement agencies seem to have targets for more and bigger cases. That way, they will be considered to have achieved something. And the easiest way to achieve that target is to investigate these bad loans. It is almost certain that they will find fault, even if it is only a minor procedural issue, such as the color of the pen used to sign the credit agreement.

According to data from the Infobank Research Bureau (birI), the position of bad debts in Indonesian banks as of November 2025 is at 2.21 percent, equivalent to Rp183.73 trillion. The potential for non-performing loans reached 9.22 percent (loan at risk/LAR). To make matters worse, non-performing loans hit the MSME sector. So, non-performing loans exist in various segments. Meanwhile, the position of bank loans for the same period exceeded IDR 8,314 trillion.

It’s called a bank, so bad debt is a common occurrence. There’s no need to worry. And lately, state-owned bankers have been losing sleep over a specter that could turn into a nightmare. They could face criminal charges, even though the loan itself is a civil agreement.

In fact, there is already the P2SK Law, which came into effect in 2023. This law contains an article stating that the Financial Services Authority (OJK) is mandated to conduct investigations. So, if there are bad loans, whether due to business risks or fraud, at least the OJK will investigate. If it is due to fraud, the OJK can send the files to law enforcement.

However, bankers who diligently pay their dues to the OJK feel that no one is defending them when they face bad debt cases. The OJK should be at the forefront of supporting bankers. This is not without reason. The OJK is the one who knows the inner workings of banks. Do not then say that its supervision is only sampling and lacks manpower. This is not a smart excuse. The OJK can also ask public accountants to help.

So far, the OJK has rarely been heard to use its authority. In fact, the philosophy behind the P2SK Law – especially the article on investigation – was to prevent law enforcement agencies, which lack an understanding of the ins and outs of banking, from investigating credit cases experienced by banks. This could be done first by the OJK, before requesting assistance from law enforcement agencies. But now, where is the OJK’s courage?

When there is a problem loan, the first instinct should be to investigate the root cause or cause of the problem. According to the results of a limited discussion by the Infobank Institute based on experience, there are three possible scenarios. First, the debtor’s business failure, which is purely due to an economic storm or mismanagement. This is an area of business risk that is inherent in the banking world.

Second, the negligence scenario. The credit granting process violates procedures and prudential banking principles. Third, the malicious intent scenario. This is the most dangerous. It starts with a credit application by a debtor with a bogus business, supported by false documents for the purpose of stealing bank money from the outset. Especially if accompanied by collateral whose value evaporates – not enough to cover the loan.

This is the crucial point. When malicious intent is involved, the obvious question is: who is in cahoots? Is it just the staff member who approved the forged documents, or is there a longer chain of involvement? Staff errors do not automatically implicate directors in criminal liability, even if they are the ones who signed the credit agreement.

The signing of the agreement by the directors is the final task in a long credit analysis process. If the standard operating procedure (SOP) has been carried out prudently by the staff and their subordinates, then the decision is a business decision based on good intentions. It is not appropriate for this good business decision to be corrupted by the logic of law enforcement.

Based on Infobank records, in corruption cases, there are many irregularities in the construction of indictments. The indictments often lack material analysis. The pattern is simplistic: because the director signed, then the loan defaulted, he is guilty. This is a misleading indictment! Without proof of malicious intent or deliberate error on the part of the directors, the indictment is like accusing the captain of sinking the ship just because he was at the helm when the storm hit.

An example of this is the case of PT Sri Rejeki Isman Tbk (Sritex). Currently, the former directors of three regional development banks, namely Bank Jakarta, Bank Jateng, and Bank BJB, have been named as suspects. Unless they received gratuities. However, if there is no evidence and no flow of funds, then naming them as suspects without mens rea and without gratuities is clearly a mistake.

Meanwhile, if there are false financial statements resulting from bogus audits, or embellished collateral appraisal reports, then the parties who must first be investigated are the debtor, the public accountant, and the asset appraiser. They are the source of the deception. Bank officials can only be prosecuted if they are proven to have known about and allowed the false documents to be passed, thereby contaminating the analysis process.

Directors should not be held responsible simply because of their position. Responsibility is a matter of knowledge and intent. They cannot be punished if they did not know that the documents at the lower levels were fake (authentic but false).

Bad debt can be a reflection of normal business failure. However, it can also be evidence of banking crime or corruption. The task of law enforcement is to distinguish between the two with a sharp analytical knife, not a blunt hammer of indictment.

We must not kill the business climate by criminalizing economic decisions, while the real perpetrators—the document forgers and fictitious business creators—are left free to play in other arenas. These days, bankers are afraid to extend credit. Indonesia needs intelligent justice, not just easy verdicts. Hello, OJK!