What Is a Dark Bank?

Agency which conducts collection of public funds without permission from the competent authorities.

Financial Fervices Authority

What Is a Dark Bank?

Black Bank is a business entity that carries out banking business activities , such as receiving funds from the public and channeling it to the public, without a business license to conduct these activities from the leadership of Bank Indonesia. It is said to be a “black bank” because when the party carries out bank activities such as raising funds from the public in the form of deposits, it does not have permission from Bank Indonesia to do so.

Activities that can be categorized as illegal banks include investment banks , mortgage lenders, money market funds, insurance companies , hedge funds, private equity funds and payday lenders, all of which are significant and continuing sources of credit in the economy.

Dark Bank Criteria

A practice of banking business activities can be categorized as a “Dark Bank” practice if it meets at least the following categories:

  1. The practice of banking business activities that do not get a permit from Bank Indonesia;
  2. The practice of “Bank in the Bank” business activities, for example: Bank employees / employees operate bank businesses (providing loans from and / or hold funds to the public) through an account in their name, with the beneficiaries of these accounts actually being other customers;
  3. Investment activities that lead to unlicensed banking business activities, for example: Multi-level Marketing businesses that provide credit / loan facilities to their members;
  4. The collection of funds from the public in the form of savings by promising savings interest on customer funds that are not reasonable, for example: cooperatives that provide much higher interest rates than banks in general, on the savings and loan facilities of its members;
  5. Promising improper investment returns (investment in the near future with so many benefits), whether in the form of income, returns, and / or profit sharing, both in the form of percentages and in the form of nominal amounts without clarity of background and investment calculations.

 

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