PAPER

EXTENSIVE READING

Directed By: Eva Cristiani Sinaga

SRN: 18403123

Class: A English Education Department

Semester : 4

ENGLISH EDUCATION DEPARTMENT

FACULTY LANGUAGE AND ART

MANADO STATE UNIVERSITY

2020
Praise the compiler to pray to God Almighty, because of His grace I was able to complete a
paper entitled Banking. This paper is submitted to fulfill the assignments of Extensive Reading
subject teachers. I thank all those who have helped so that this paper can be completed on time.
This paper is far from perfect, therefore the authors expect constructive criticism and suggestions
for the perfection of this paper.

Hopefully this paper provides information for the community and is useful for the development
of knowledge for all of us.

Manado, June 25 2020

Composer
CHAPTER 1

PRELIMINARY

1.1 Background of the Problem

In general, the Bank is known as a financial institution whose main activities are receiving
deposits, demand deposits, savings and time deposits. Then the Bank is also known as a place to
borrow money (credit) for people who need it. Besides that, banks are also known to exchange
money, or receive all forms of payment such as electricity, telephone, water, tax, tuition and so
on.

A bank is a financial institution whose main business is to collect funds from the public and
channel these funds back to the community and provide services in the payment and money
circulation. From this understanding it can be concluded that there are three main functions of
the Bank, namely: Bank as an institution that collects funds from the public savings form.

Banks as institutions that channel funds to the public in the form credit and other forms Bank as
an institution that facilitates trade and money trading transactions.

The author takes the theme of money papers, banks and money printing because it is interesting
to study, especially in the economic field that will not be separated from the term.

1.2 Limitation Problems

In this paper the author will set limits on the issues that will be discussed include:

• Understanding the Bank

• Banking Objectives

• Types of Banks and their functions

1.3 Writing Purpose

This paper is prepared with the aim that readers know about Banking in Indonesia.
CHAPTER 2

DISCUSSION

2.1 UNDERSTANDING THE BANK

According to RI Law No. 10 of 1998 dated 10 November 1998 concerning banking, it can be
concluded that the banking business includes three activities, namely raising funds, channeling
funds, and providing other bank services. The activity of collecting and distributing funds is the
main activity of the bank while providing other bank services is only a supporting activity.
Fundraising activities, in the form of collecting funds from the public in the form of demand
deposits, savings, and deposits. Usually while being rewarded with attractive services such as
flowers and gifts as a stimulus for the community. The activity of channeling funds, in the form
of lending to the community. While other banking services are provided to support the smooth
running of these main activities. The bank was founded by Prof. Dr. Ali Afifuddin, SE. Here are
some of the benefits of banking in life:

1. As an investment model, which means, derivative transactions can be used as an investment

model. Although in general it is a type of short-term investment (yield enhancement).

2. As a way of hedging, which means, derivative transactions can function as a way to eliminate
risk by hedging (hedging), or also known as risk management.

3. Price information, which means, derivative transactions can function as a means of finding or
providing information about the prices of certain commodity goods in the future (price
discovery).

4. Speculative function, which means, derivative transactions can provide opportunities for
speculation (luck) on changes in the market value of the derivative transactions themselves.

5. The production management function runs well and efficiently, which means, derivative
transactions can provide an overview of the production management of a producer in assessing
future market demand and needs.

Apart from the main functions of banks (banks) or their derivatives, what needs to be considered
for the banking world, is the philosophical goal of the existence of banks in Indonesia. This is
very clearly reflected in Article four (4) of Law Number 10 of 1998 which explains, "Indonesian
banking aims at supporting the implementation of national development in the framework of
increasing equity, economic growth and national stability towards improving the welfare of the
people at large". Looking deeper into the business activities of banks, Indonesian banks (banks)
in conducting their business must be based on the principles of economic democracy using the
principle of prudence.4 This is clearly illustrated, because philosophically banks have macro and
micro functions in the nation's development process .
2.2 Banking objectives

Bank services is very important in the economic development of a country. Banking services are
generally divided into two purposes. First, as a provider of efficient payment mechanisms and
instruments for customers. For this, banks provide cash, savings and credit cards. This is the
most important role of banks in economic life. Without this efficient payment instrument, goods
can only be traded in a time-consuming barter method.

Second, by accepting savings from customers and lending them to those who need funds, it
means that banks increase the flow of funds because they do not have loan funds.

2.3 TYPES OF BANKS

A. CENTRAL BANK

The central bank in a country, in general, is an agency responsible for monetary policy in that
country's territory. The Central Bank seeks to maintain the stability of currency values, the
stability of the banking sector, and the overall financial system.

In Indonesia, the function of the central bank is carried out by Bank Indonesia.

The central bank is an institution that is responsible for maintaining price stability or the value of
a currency in force in the country, which in this case is known as inflation or rising prices, which
in other words decreases the value of money. The Central Bank maintains that the inflation rate
is controlled and always at the lowest possible value or in an optimal position for the economy
(low / zero inflation), by controlling the balance of the amount of money and goods. If the
money supply is too large, the central bank uses its instruments and authorities.

The role of the central bank

1. Maintain government accounts

2. Give a temporary loan

3. Provide special loans

4. Carry out transactions involving the sale and purchase of foreign currencies (foreign
exchange)

5. Receive tax payments

6. Assist government payments from the center to the regions

7. Collect and analyze economic data

B. GENERAL BANKS

Understanding Commercial Banks according to Bank Indonesia Regulation No. 9/7 / PBI / 2007
is a bank that conducts business activities conventionally and or based on sharia principles which
in their activities provide services in payment traffic. The services provided by commercial
banks are general in nature, meaning that they can provide all available banking services.
Commercial banks are often called commercial banks.

The Role of Commercial Banks

1. Creation of money

The money created by commercial banks is demand deposits, which are means of payment
through a clearing mechanism.

2.Supports Smooth Payment Mechanisms

Another function of commercial banks which is also very important is to support the smooth
operation of the payment mechanism. This is possible because one of the services offered by
commercial banks is services related to payment mechanisms.

Some of the most well-known services are clearing, transferring money, receiving deposits,
providing payment facilities by cash or credit.

3. Community Savings Fund Collection

The funds most commonly raised by commercial banks are deposit funds. In Indonesia, savings
funds consist of current accounts, time deposits, certificates of deposit, savings and or other
forms which can be equivalent. The ability of commercial banks to raise funds is far greater than
that of other financial institutions.

4.Supports Smooth International Transactions

Commercial banks are also very much needed to facilitate and / expedite international
transactions, both goods / services transactions and capital transactions.

5. Storage of Valuables

Storage of valuables is one of the earliest services offered by commercial banks. The public can
store their valuables such as jewelry, money and diplomas in boxes deliberately provided by
banks for rent (safety box or safe deposit box).
6. Provision of Other Services

In Indonesia the provision of other services by commercial banks is also increasingly large and
widespread. At this time we can pay for electricity, phone to buy mobile phone credit, send
money through ATMs, pay employee salaries using bank services.

These services are very easy and provide a sense of security and comfort to those who use them.

c.BPR (Rural Credit Bank)

BPR is a bank that conducts business activities conventionally or based on sharia principles in
which its activities do not provide services in payment traffic. BPR activities are much narrower
when compared to Commercial Bank activities. BPR activities are generally the same as
Commercial Bank activities, only the difference is the amount of bank services performed by
BPRs is much narrower. BPRs are limited by various requirements, so they cannot act as freely
as commercial banks. The limitations of BPR activities are also related to the mission of
establishing the BPR itself. In practice BPR activities are as follows:

1. To collect funds only in the form of:

• Savings Savings

• Deposit Deposits

2. Channeling funds in the form of:

• Investment Credit

• Working capital credit

• Trade Credit

Because of the limitations possessed by BPRs, there are a number of restrictions that BPRs
should not do, as follows:

• Receive Demand Deposits

• Conducting Foreign Exchange Activities

• Conduct Insurance Activities

CLOSING

A. Conclusion
According to RI Law No. 10 of 1998 dated 10 November 1998 concerning banking, it can be
concluded that the banking business includes three activities, namely raising funds, channeling
funds, and providing other bank services. The activity of collecting and distributing funds is the
main activity of the bank while providing other bank services is only a supporting activity.
Fundraising activities, in the form of collecting funds from the public in the form of demand
deposits, savings, and deposits. Usually while being rewarded with attractive services such as
flowers and gifts as a stimulus for the community. The activity of channeling funds, in the form
of lending to the community. While other banking services are provided to support the smooth
running of these main activities

A bank is a financial intermediary institution generally established with the authority to accept
deposits, lend money, and issue promissory notes, known as banknotes.

From the description of the paper above, it is expected to be able to increase the knowledge of all
readers about Money, Banks and Printing of Money in Indonesia.

It is our hope that this paper will be useful for writers in particular and also for readers

REFERENCES

• http://artikaamanda.blogspot.com/2012/03/fungsi-dan-peranan-bank-umum-bank.html

• http://id.wikipedia.org/wiki/Bank

• http://kholiscollection.blogspot.com/2011/02/makalah-uang-bank-dan-percetakan-
uang.html

• http://tutorialkuliah.blogspot.com/2009/09/contoh-kata-pengantar-makalah.html

• http://wartawarga.gunadarma.ac.id/2010/02/definisi-fungsi-dan-peranan-bank-umum-
dalam-perekonomian/