THE ROLE OF COMPLIANCE AUDIT IN INCREASING EFFECTIVENESS OF LENDING ACTIVITIES (CASE STUDY : PT.BANK PEMBANGUNAN DAERAH SUMATERA BARAT SOLOK BRANCH)

ARIF, ARIADI (2013) THE ROLE OF COMPLIANCE AUDIT IN INCREASING EFFECTIVENESS OF LENDING ACTIVITIES (CASE STUDY : PT.BANK PEMBANGUNAN DAERAH SUMATERA BARAT SOLOK BRANCH). Diploma thesis, UNIVERSITAS ANDALAS.

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Abstract

Recently, banks in Indonesia are faced with highly level of competition. Competition does not only occur between banks, but also come from other financial institutions that have developed new financial products. Competition between banking institutions and rapidly growth in the banking business make each banking institution must compete to win business competition. Therefore, banking institutions need to improve performance in order to survive in a crisis situation or win the competition in the era of globalization. Business people must always be ready to face the changes happens quickly. Indonesian banking industry is running based on economic democracy by using the conservatism principle. According to Banking Act 1992 article 2, 3, and 4, bank has a function as a collector and regulator of public funds. It aims to support the implementation of national development in order to enhance equitable economic growth and national stability to improve the prosperity of society (Banking Act 1992 art. 2, 3, and 4). As collector and regulator of funds, bank collects funds from the public and passes it back in the form of loans. Bank is also a business entity, which would naturally expect profits from its activities. However, in lending activities, aside from meeting company profit motive, banks should also be able to guide debtors so that loans that have disbursed could meet the target. Assuring that lending activities goes as predetermined plan, some efforts are necessary to achieve the goal. One of the managerial tools that used to monitor lending activities is compliance audit.

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