Group 1

Financial Institutions
and Monetary
Authorities
Whose Member
Anita Ananda Pratiwi 2261201188

Meliani Afselia 2261201214

Muhammad Surya 2261201201

M.Novaldi Ramadan 2261201255

 History of Banking
Banking practices have actually been around since
Babylonian, Greek and Roman times. Banking practices at
that time really helped trade traffic. Initially, banking practices
at that time were limited to exchanging money. Over time, this
practice developed into a business of accepting savings,
entrusting them, or lending money by charging interest on the
loan
Form of Financial Institution
Based on Law no. 10 of 1998 concerning "Amendments to Law No.
7/1992 concerning Banking", bank financial institutions consist of
commercial banks and people's credit banks. Commercial banks and
rural credit banks can choose to carry out their business activities on the
basis of conventional banking principles or banks based on sharig
principles. The types of non-bank financial institutions are more varied.
Non-bank financial institutions can be financing institutions (leasing
companies, venture capital companies, factoring services companies,
consumer finance companies, credit card companies, securities trading
companies), insurance businesses, pension funds, pawnshops, capital
markets, etc. other.
 Money Classification
The definition of money that is often used in discussions of financial institutions can vary,
considering that money has a certain classification. Theoretically, money can be classified into
two main groups, namely money in a narrow sense (narrow money) and money in a broad sense
(broad money). The form of money included in each classification basically depends on the
circumstances of the local community. This classification is based on the level of liquidity of
each form of money. A form of money that is currently less liquid may become more liquid in
the future.
Money in a Narrow Sense
Money in the narrow sense is a form of money that is considered to have the highest liquidity.
The money included in the definition is currency and demand deposits. Currency is official
money or means of payment, usually legal ones issued by the central bank or Bank Indonesia in
the form of paper money and coins which are usually used by the public for daily economic
activities.
 Definition of Money:
Something Accepted as a Means of Payment
Money Requirements
Generally accepted, the value is stable, the amount is sufficient, easy to carry, long-
lasting is the contribution of public funds to bank financial institutions in the form of
checking accounts. The narrow sense of simum money in theoretical calculations is often
given the notation M1. The term money supply which is often used in everyday
discussions, if not given specific boundaries, is usually interpreted as money in the
narrow sense.

Money in the Broadest Understanding

Money in a broad sense can be interpreted in two groups. In general, the first group or
what is usually given the notation M2 usually consists of narrow money plus savings
accounts (saving deposits) and time deposit accounts (time deposits). Saving deposits are
deposits of public funds in bank financial institutions in the form of savings accounts.
Time deposits are public savings in bank financial institutions in the form of deposit
accounts. The second group or what is usually given the notation M3 consists of M2 plus
all public deposits in non-bank financial institutions.
 Function of Money
Money is something that is generally accepted as a means of payment for purchasing goods and
services, paying debts, taxes, and others. There are two things to note in this definition. First, money
must be generally accepted, second, it can be used as a means of exchanging goods and services. Apart
from that, money can also be seen as wealth owned by a person which can be used to pay a certain
amount of debt with certainty and without delay

Money Requirement
a. Money must be generally acceptable.
b. Money must have a stable value.
c. The amount in circulation must be sufficient for needs.
d. Money must be easy to carry for daily business and should not be an obstacle to carrying our
transactions.
e. In the process of business transactions, money will change hands.
f) Money printed and circulated by Bank Indonesia must include everything both small and large so as
to make it easier to exchange or share easily

The Role of Money

a. Means of exchange
b. Value measuring device
c. Future payment standard
d. Tools for accumulating wealth or purchasing power
 Function of Money
Money is something that is generally accepted as a means of payment for purchasing goods and
services, paying debts, taxes, and others. There are two things to note in this definition. First, money
must be generally accepted, second, it can be used as a means of exchanging goods and services. Apart
from that, money can also be seen as wealth owned by a person which can be used to pay a certain
amount of debt with certainty and without delay

Money Requirement
a. Money must be generally acceptable.
b. Money must have a stable y value.
c. The amount in circulation must be sufficient for needs.
s. Money must be easy to carry for daily business and should not be an obstacle to carrying out
transactions.
e. In the process of business transactions, money will change hands.
f) Money printed and circulated by Bank Indonesia must include everything both small and large so as
to make it easier to exchange or share easily

The Role of Money

a. Means of exchange
b. Value measuring device
c. Future payment standard
d. Tools for accumulating wealth or purchasing power
 Bank Functions, The Role of Banks and Non-
Bank Financial Institutions
Bank Function
In general, the main function of banks is to collect funds from the public and distribute them back to
the community for various purposes or as a financial intermediary. More specifically, banks can
function as agents of trust, agents of development, and agents of services.
a. Agent of trust
b. Agent of development
c. Agent of services

The Role of Banks and Non-Bank Financial Institutions

Banks and non-bank financial institutions have an important role in the financial system, namely
a. Asset transfer (asset transmutation)
b. Transactions
c. Liquidity (liquidity)
d. Efficiency
Thank you !