The Function Of The People's Credit Bank And The Difference With Commercial Banks

Illustration of the People's Credit Bank (Magelangkota.go.id)

YOGYAKARTA The People's Credit Bank (BPR) has long been relied on by the public to replace the function of commercial banks. BPR itself is intended for local communities. Its function as a BPR is limited by administrative areas. The function of the People's Credit Bank itself is not much different from that of commercial banks, but there are several things that are different. Check out this article to get the full information.

In general, the function of BPR is as a financial institution that accepts public savings. This function is also owned by banks in general. However, if explained, the function of BPR is practically quite large, namely as follows, quoted from various sources.

As a financial institution, BPR provides savings and loan services to the public. The available storage services are savings, time deposits, or other forms. These services can be accessed by rural communities with simpler terms and conditions than commercial banks.

BPR also functions as a credit channel to micro, small and medium enterprises (MSMEs) by prioritizing the principles of being on time, on the right number, and on target. The credit provided by BPR is relatively faster than that of commercial banks. In addition, the requirements are simpler so that it can be met by the community.

Throughout its history of existence, BPR is considered as one of the financial institutions that has a role to support regional economic growth. This role cannot be separated from the function of BPR as a regional MSME lending bank. With this function, BPR indirectly boosted the regional economy.

Another function of BPR is as an alternative to formal financial services. BPR is the answer for people who do not have access to general banking services.

As is known, many people, especially in rural areas or 3T areas, are still difficult to access public banks. These restrictions are for example related to locations, strict financial service requirements, and so on. To replace the role of commercial banks, BPR can be the right choice.

As a financial institution, BPR also takes part in community education efforts related to financial literacy. A simple example of the BPR's educational function is to help introduce the public the concept of saving, how to regulate income, and much more.

Although both become legal financial institutions, BPR and commercial banks have several differences. The following is the difference between BPR and commercial banks, as reported by the Differences in Commercial Banks and People's Credit Banks on Bank Duties and Functions According to Law no. 10 of 1998 was written by Jesica Sumual in the Lex Administratum Journal.

BPR only raises funds in limited form and does not receive deposits in the form of giro. Meanwhile, commercial banks provide more varied fundraising services.

2. Foreign exchange activities

Foreign exchange activities can only be carried out by commercial banks. Meanwhile, BPR is not allowed to hold these activities without special permission.

3. Products and services

BPR products and services are more limited. Meanwhile, commercial banks have more complete financial products and services.

Those are some of the functions of the People's Credit Bank. Visit VOI.id to get other interesting information.