Vol. 5, Issue 2 (2019)
The efforts of the fraud prevention harming banks in the transactions of letter of credit
Author(s): Ratna Eta Karina, Moch. Najib Imanullah, Pujiyono
Abstract: Government Regulation of the Republic of Indonesia Number 1 of 1982 concerning Export, Import, and/or Foreign Exchange Transaction has not regulated the use of Letter of Credit (L/C) comprehensively. Using L/C as a payment method has a variety of risks. One of them is fraud, both caused by external and internal factors in banking. Most of cases of L/C caused by fraud in Indonesia involve the game of internal bank parties for personal or some parties' interests so that it causes considerable losses. This article would focus on the cases that occurred at PT Bank Negara Indonesia (Persero) Tbk which came up in 2003 and Century Bank in 2009. The efforts of the prevention are needed so that cases of fraud in L/C activities in the future can be avoided, both carried out by the banking parties as an agency and the establishment of more comprehensive regulations governing L/C.