Legal Responsibility for Misuse of Notary Covernotes by Banks Due to Credit Disbursement Based on Notary Covernotes

Abstract

This study discusses the legal liability for the misuse of notary covernotes by banks in credit disbursement. Notary covernotes in banking are often used as a basis for credit disbursement before all formal requirements for collateral binding are met, particularly Mortgage Rights. However, the existence of covernotes is not explicitly regulated in laws and regulations, thus causing legal problems if used as a basis for credit disbursement and potentially harming the bank when the debtor defaults. This study aims to analyze the forms of bank losses due to credit disbursement based on covernotes, the legal consequences of such credit disbursement, and the form of notary legal liability for covernote misuse by banks. The research method used is normative juridical with a statutory and conceptual approach. Primary, secondary, and tertiary legal materials were obtained through literature studies and analyzed qualitatively using descriptive-analytical methods. The results of the study indicate that credit disbursement based on covernotes can cause financial losses and legal risks for banks because the collateral does not have executorial power. Legally, a covernote is not an authentic deed and does not have binding force like a notary deed. The notary's liability for misuse of covernotes can in principle be in the form of administrative, civil and ethical code liability as long as there is evidence of negligence or unlawful acts in its issuance.