Protection of Consumer Rights in Bank Credit Agreements Based on the Principle of Balance

One of the major issues in a credit agreement is the absence of equal opportunity to both the parties, thus violating the principle of balance. In a bank credit agreement, the creditor is usually the stronger party which makes use of pre-determined and unilateral provisions and the debtor (customer) does not participate in the negotiation or bargaining. This study attempted to examine the extent to which the principle of balance actually works towards the protection of the consumer rights in a credit agreement and find out what legal mechanism exits if there is a violation of the principle of balance. The present study adopted the normative legal research approach to analyze the implementation of the principle of balance and protect consumers' legal rights in a bank credit agreement. The data was collected from legal archives, books and empirical studies. The Indonesian Civil Code and the Consumer Protection Law (UUPK) were major legal references to examine the compliance of principle of balance in credit agreements. An important finding of the study was the role played by Financial Services Authority or OJK, which regulated that banks should comply with the principles of balance, fairness, and proportion in signing agreements with consumers. The OJK prohibits the inclusion of exoneration clauses in credit agreements which might increase the rights and/or reduce the obligations of the banks and reduce the rights and/or increase the obligations of the consumers. The study recommends that bank credit agreements should be included in the Civil Code. Such regulations should be framed that ensure the implementation of principle of balance in bank credit agreements and which can be determined, amended, or revoked only with the approval of the Minister of justice.