The Implementation of Prudential Banking Principle In The Process of Channeling of Funds At Bank Riau Kepri Based on Banking Law

Abstract. A bank is a company whose business activities raise funds from thecommunity, channel funds to the public, and provide financial services. Of thethree business activities of the bank, the activity of channeling funds is anactivity that is a source of income spread to banks. However, large profits aredirectly proportional to the high level of risk, namely the occurrence of nonperformingloans. What is the implementation of prudential banking principlein the process of channeling funds to Bank Riau Kepri under the Banking Act?The method used in this research is socio-legal research. The results of this studythat based on Law Number 10 of 1998 about Banking, credit provided by bankscontains risks, so that in its implementation banks must pay attention to soundcredit principles. To reduce this risk, before giving credit, banks must make acareful assessment of the character, ability, capital, collateral and businessprospects of the customer, or better known as the principle of 5C (character,capacity, capital, collateral, and condition). The implementation of prudentialbanking principle in the process of channeling funds to Bank Riau Kepri isregulated in the form of Decree of the Board of Directors of Bank Riau KepriNumber 22 / KEPDIR / 2013 about Bank Credit Policy