0 Maintaining Trust Bank

Maintaining Trust Bank

Why banks are always referred to as an institution of trust? This is not because the banks sold securities in the form of demand deposits, savings and time deposits. Clients come to an institution they bank with the money which was then replaced by securities of the bank concerned agencies.

Obviously this depends on the type, such as savings in the form of savings, the customer will get a passbook. It stores in the form of demand will get a check or bank draft as well and slips for deposits.

Why letter or document to be valuable? This is because by showing ownership of the document, eg in the form of a deposit slip, the customer can redeem the funds in accordance with the requirements imposed.

As it pertains to the public trust given to banks, trust is manifested in the form of secret who buys holdings. Or, in everyday language, the banks maintain the confidentiality of information relating to its customers.

Some argue, then, the bank may sell securities mistress to anybody, including people who do not clear identity and legality. Surely not. Banks are required to identify risks through what is called the know your customer (KYC). Through the application of KYC, banks make record information about customers.

Another thing that should be done within the framework of maintaining the trust is the imposition of the obligation to report suspicious transactions. Suspicious transactions can not always be judged as a crime or a part of the crime.

For example, if you make the transfer over USD 500 million, the customer must specify both the source and allocation of funds. If customers do not want to explain, the bank will enter the transaction as a suspicious transaction.

Maintaining client confidentiality is an obligation of the bank protected by law. Although there are legal issues to clients, without meeting the requirements imposed laws, banks are obliged not to give.

Banking Stability

Why practices such protection to depositors tight? It is inseparable from other than an effort to maintain confidence in the bank, was also part of an integral to maintaining banking stability. Why is there a linkage with the confidence and stability of the banking system?

First, the stability of the banking system in practice is more influenced by the ability of the bank to manage the sources and uses of funds. It is a characteristic of the banking business anywhere that duration is always short-term deposits, while a longer duration loans.

Second, the nature of the securities, either in the form of demand deposits, savings and time deposits, can not be traded, but are illiquid. Thus, a savings bank that is very sensitive and instantly drawn large amounts of funds, while the sources of funds have not come back because it is still used for credit.

For that reason, the rumors, for example, or otherwise unable to participate bank or clearing very definitely lose customers quickly responded by immediately disburse their funds at the bank.

With both of these traits, instinctively every banker always keep the source and use of funds properly and carefully in order not to run into trouble. To avoid such problems, efforts to build customer loyalty has always been a priority.

Various efforts often fail when external factors are not conducive. There are external factors that can trigger, such as an atmosphere of uncertainty, both in the political, security, and social.

Century Bank case

One external factor that has recently become the center of attention is the activity in order to address the issue of Bank Century rescue. It is not excessive if only those activities very interesting because it so openly publicized event.

This phenomenon is nothing new, because it was a "spectacle" that attracts so inviting responses from the audience. Starting from the manner and style of speaking to the attitudes, behaviors, and ethics to be part of the discussion. For and on behalf of democracy, it all seems to be no question.

There jargon that said, if anyone bitten by a dog, not news. Recently in the news when it happens reversed. Statements flat course though right frequently not be news, but things are uncertain the truth even news. It is all too similar to the packaging and the name of democracy.

Often neglected that the distortion of information produces a rumor and with good packaging to be more reliable. These conditions must be observed because it is very likely to lead to distrust of the banking system in particular, which in turn would disrupt the stability of the banking system.

Whatever effort will be made to complete the rescue of Bank Century corridor should remain on the presumption of innocence, obey the law, and consider the impact on public confidence in the bank.

All parties should react wisely in order not to fertilize rumor, fear, and distrust of the national banking system.

We certainly do not want to solve a problem, but by producing a bigger problem, which reduced public confidence in the banks that led to the disruption of the stability of the banking system. If this happens, it certainly will be more expensive cost.