INTRODUCTION

Money Is the legal transactions payment

H ISTORY OF M ONEY Barter Systems interchanging the goods and products utilizing trading tool from agricultural products as cocoa and others (this is known as “money commodity”)

Gradually changed to hard objects like stone and metal Commodity functioned as trading tools Croesus from Greek (560 – 546 Prechristian) created gold and silver coins

Benjamin Franklin (Amerika) Known as “You Are Bank Note” The first person to print bank note (dollar)

FINANCIAL INSTITUTION An institution (public or private) that collects fund (from the public or other institutions) and invests them in financial assets; provides financial services for its clients or members

Financial Institution Bank Non Bank Finance Company Cooperation Capital Market Insurance Company Pledge Company

I NDONESIAN B ANKING H ISTORY NoBank Role DevelopmentIts Region Development 1Commerce among royals. Bank as money exchange institution for business men among royals Babylonia era antique Greece era Romanian era 2World commerce Bank as intermediate institution, which accepted fund from society in deposit and give that fund back to society that needed credit Europe (Industrial Revolution) (England, France, Dutch, Spain, Portugese) West Asia (European colony) Indonesia ( Dutch colony)

1746 The first Indonesian Bank is De Leening's Van Bank, founded by VOC in Javanese 1752 De Bank Van Leening became De Bank Courant En Bank Van Leening. Total banks established by Dutch in Indonesia increased. One of them was De Javasche Bank, afterward became Indonesian Central Bank De Javasche Bank became the commercial bank

1949 “Konferensi Meja Bundar” at Den Haag. Dutch, increase d the roles of the De Javasche Bank as Central Bank and Commercial Bank De Javasche Bank nationalized and changed its name to “Bank Indonesia” (UU Pokok BI No. 11/1953) its had double roles. Thus, worsened the economics 1955 PP No. 1/1955 governed credit, role and authority of banks in Indonesian

1968 Law No. 13/1968 “Bank Indonesia” was limited its function as central bank Law No. 23/1999 Function and position of “Bank Indonesia” were independent and free of government interference

“Bank Indonesia“ Responsibility are: 1. Establishing and performing monetary policy 2. Managing and monitoring the flow of paying system 3. Managing and supporting banking company in Indonesian

I NDONESIAN B ANKING A RCHITECTURE (IBA) Background of IBA Responded to economic crisis 1977, defined banking industry weaknesses including its disability to withstand the threats such as the external threats of industry Definition of IBA As framework for Indonesian banking formative and continuity its operating system for years

Responsibility of IBA Making banking system strong and efficient that created financial stability and increase the economic growth Bank categorization based on IBA Bank CategoryTotal Capital 1. International Bank> Rp. 50 Trilliun 2. National Bank> Rp. 10 Trilliun – Rp. 50 Trilliun 3. Focus Bank Rp. 10 Milyar – Rp. 10 Trilliun 4. Limited Effort bank< Rp. 100 Milyar