IMPACT OF COVID-19 PANDEMIC TO THE PAYMENT OBLIGATIONS TO BANKS AND FINANCIAL INSTITUTIONS; A PERSPECTIVE FROM INDONESIAN LAWS AND REGULATIONS

Abstract

COVID-19 pandemic has caused difficulties; among them was financial distress. This situation has led to the issue of force majeure. The research aims to discuss the effect of the pandemic COVID-19 to payment to banks and other financial institutions in Indonesia, as to whether a force majeure event has happened and how to deal with it. This research is descriptive-analytical, normative legal research. It used secondary data, available for the public, consisted of primary legal sources and secondary legal sources with tertiary legal sources as a supplement. Data obtained through the literature study were analyzed qualitatively. The researcher conducted triangulation to maintain the validity and reliability of data. Result finds out that the COVID-19 pandemic cannot be automatically used as force majeure reason concerning financial obligations. The Government of the Republic of Indonesia has issued Government Regulation in Lieu of Law No.1 Year 2020 that provides contingency plans for financial institutions to handle the COVID-19 pandemic situation, which allowed banks and financial institutions to offer payment relaxation