By Eko B. Supriyanto, Editor-in-Chief of Infobank Media Group
The political economy of Indonesia’s banking sector is ailing. The symptoms are clear: bankers are terrified, credit analysts are scrambling to transfer to other departments, and some would even rather resign than risk their careers. The cause is not a monetary crisis or global turmoil, but rather a “ghost” deliberately created by law enforcement agencies (LEAs) themselves: the baseless criminalization of non-performing loans. In fact, even loans granted 12 years ago can become a “ghost” charge for credit analysts.
Let’s look at the data. As of December 2025, the national banking sector’s non-performing loan (NPL) ratio stood at 2.21 percent, equivalent to Rp183.73 trillion. Statistically, this figure is considered healthy, falling below the 5 percent threshold. However, what is concerning is not the NPL figure itself, but the potential for “loans at risk” (Loan at Risk), which stands at 9.22 percent—a ticking time bomb ready to explode if the credit climate continues to deteriorate.
Even more absurd is the fact that, despite the government’s aggressive injection of Rp200 trillion in fresh funds into the state-owned banks (Himbara) in September 2025 to boost economic growth to 8 percent, there remains Rp2,500 trillion in undisbursed loans. This is not because the banks lack funds, but because bankers and credit analysts are afraid to extend loans. They fear criminal prosecution in the future, even though they have followed all procedures and principles of prudence when the loans were disbursed.
In banking practice, non-performing loans are an inherent part of the risks associated with financial intermediation. These risks are already accounted for through risk management and prudential supervision, and must be resolved through civil and administrative legal mechanisms, not criminal ones.
Criminal law is the ultimum remedium, the last resort. This remedy should only be used if there is an element of intent (mens rea), such as document forgery, collusion, or embezzlement. It is not intended for cases where the entire credit process was conducted in accordance with procedures and in good faith, but the debtor defaulted due to external factors.
The case of PT Sri Rejeki Isman Tbk (Sritex) is the clearest example. The directors of three Regional Development Banks (Bank DKI, Bank Jateng, and Bank BJB) were accused of causing losses to the state due to problematic loans extended to Sritex. The bankers granted the loans based on favorable figures from a Public Accounting Firm (PAF). Creditworthy. In fact, Sritex’s financial statements looked healthy.
So, what was the bankers’ mistake? None. There was no mens rea (criminal intent), no illegal flow of funds into personal pockets. There was only unforeseen business risk. However, law enforcement agencies, with tunnel vision, focused on Sritex only after the loans had gone bad, and then easily charged the bankers under Articles 2 and 3 of the Corruption Criminal Law—provisions regarding “benefiting a third party,” which have long been the most terrifying “ghost” for professionals.
The question is: since when has a business failure undertaken in good faith become a criminal offense? A surgeon who loses a patient due to medical complications is not jailed, as long as they acted in accordance with standard procedures.
A general who loses a war due to the enemy’s superior intelligence is not sentenced to death. But in this country, a banker whose loans go bad due to forest fires, land disputes, or global market turmoil—things completely beyond his control—could end up behind bars.
The consequences of this “ghost” are real and measurable. On the ground, thousands of credit officers at Himbara banks, regional development banks (BPDs), and local government-owned rural banks (BPRs) are now living in fear. They are on edge every day. Even more concerning is that many credit analysts—the frontline of risk assessment before funds flow to the public—are choosing to transfer to other departments or even resign.
According to Infobank’s investigation at regional banks and Himbara institutions, a significant number of employees are anxious and requesting transfers, and some are even resigning.
“That’s true. Many credit analysts are requesting transfers, and some have resigned, fearing that 10 years from now, after they’ve retired, the loans might go bad and they’ll face criminal charges,” said one bank director who wished to remain anonymous to Infobank.
Clearly, this is a silent yet destructive phenomenon of internal brain drain. When the people who understand credit best choose to leave, the credit assessment systems in our banks will gradually be run by those who are incompetent—or worse yet, by those who are unwilling to take risks.
Yet, the essence of banking is risk management, not risk avoidance. Without the courage to take measured risks, credit will never flow to the real sector. SMEs will wither away from a lack of funds. The 8 percent economic growth targeted by President Prabowo Subianto’s administration will remain a mere dream. This is not merely a legal issue, but an economic and political issue that concerns the livelihoods of many people.
Why is this happening? The reason is simple: law enforcement agencies are currently like hungry hunters. They have an ever-growing number of cases to target, and the stakes are getting higher. The greater the amount of state losses claimed, the higher their performance metrics. And non-performing loans are the easiest targets. Try examining each non-performing loan at any bank, and you’re sure to find a “mistake”—even if it’s just the color of the pen used to sign the loan approval document.
Between 2019 and 2024, the Indonesian Legal Aid Foundation (YLBHI) and the Legal Aid Institute (LBH) recorded 95 cases of criminalization, ensnaring people from various backgrounds—from academics, farmers, and students to journalists. This figure represents only the recorded cases. Imagine how many unreported cases of criminalization related to non-performing loans affect bankers in remote areas, at small rural banks (BPRs) that lack access to top-tier lawyers and lack the power to stand up to the state’s legal machinery.
This unhealthy trend must be stopped. There are two avenues that can and must be opened immediately. According to a limited discussion by Infobank, at least the following steps must be taken.
First, President Prabowo must issue a firm directive to the Attorney General’s Office and the Indonesian National Police to halt the practice of criminalizing bad debt. Law enforcement agencies must be retrained to understand the difference between normal business failure and intentional corporate criminal acts.
State losses resulting from business decisions made in good faith must be resolved through civil litigation, not criminal charges. The Financial Services Authority (OJK), which has been granted investigative authority under the 2023 P2SK Law, must take the lead, not follow behind the bankers who pay its fees.
Second, Commission III of the House of Representatives must take this issue seriously. This commission, which oversees law, human rights, and security, has the authority to summon the National Police Chief, the Attorney General, and the heads of judicial institutions to account for the rampant criminalization that is occurring.
Commission III must push for revisions to the implementation of Articles 2 and 3 of the Anti-Corruption Law, which have long been open to multiple interpretations and frequently abused. We must ensure that provisions designed to prosecute corrupt officials do not instead become a tool to “stifle” the professional courage of the banking sector.
The simple conclusion is that not all non-performing loans constitute corruption. If every business failure is criminalized, no one will dare to start a business, no one will dare to extend credit, and gradually the lifeblood of this nation’s economy will cease to flow.
The state must not allow the “ghost” of a provision that benefits other parties to continue haunting and paralyzing the heart of the banking credit system. The President and Commission III must intervene. Not to protect corrupt bankers, but to protect honest and professional bankers—who have long been the backbone of channeling funds to the real sector.
We cannot continue to let fear rule our banking system. Stop criminalizing non-performing loans, preserve the banking sector’s intermediary function, and allow bankers to work with peace of mind—free from the specter of prison bars—for taking reasonable business risks. Otherwise, do not be surprised if this nation finds itself increasingly short of oxygen to breathe amid increasingly fierce global economic competition. This isn’t just about bankers; it’s about the future of the nation’s economy.
It is time for the government to stop criminalizing non-performing loans. It is time to return credit matters to the civil realm and let business risks play out as they should. Because if not, what will die is not just the careers of bankers, but also Indonesia’s own economy, which aims to grow by 8 percent.
If the President and Commission III of the House of Representatives fail to resolve this criminalization, then the country is effectively losing its engine of economic growth from the banking credit sector. This is far more dangerous.
