Banking is an activity that is currently mostly cultivated most of the people of Indonesia. However, it seems there are still many who do not know what exactly the sense, function and task of banking itself. Generally, banking is identical with financial problems, whether it be in the form of deposits, loans, demand deposits, and so forth. This article will cover the full understanding of banking functions and tasks. But before discussing the sense, function and task banking further, it's good a little listening to banking history first.

- History of Banking

The banking system was first recognized during the Babylonian period. Banking then more developed during the richness of Ancient Greece and Ancient Rome. At that time, banking activities were just money exchange, but gradually banking functions and duties grew to become a place of lending as well as a daycare center. The money deposited in the bank is then lent to the people in need.

History of banking in Indonesia developed during the Dutch East Indies colonization. Functions and tasks of banking time was not much different from the days of Greece and Ancient Rome, namely as a place of exchange, daycare, and borrowing money. Several banks belonging to the Dutch East Indies played an important role in the history of banking in Indonesia. These banks include De Post Paar Bank. De Escompto Bank NV, De Algemenevolks Crediet Bank, Nationale Handles Bank (NHB), De Javasche NV, and Nederland Handles Maatscappij (NHM).

In addition to the banks of the Dutch East Indies, there are also indigenous and European-owned banks, Japan and China, namely the National Bank of Indonesia, Bank Abuah Saudagar, Batavia Bank, NV Bank Boemi, The Bank of China, and The Matsui Bank.

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It can not be denied that the banks that prevailed in the Dutch East Indies colonial era became a cornerstone of the banking system in Indonesia, which of course also improve the functions and tasks of banking from the beginning just as a money exchange, become more complex.

After the independence of Indonesia, more banks were established to maintain economic stability in Indonesia, some of which were Bank Negara Indonesia (BNI) established in 1946, Bank Rakyat Indonesia (BRI) established on February 22, 1946, and Bank Indonesia (BI) was first established in Palembang in the same year. All three banks are still successful today and are countless successful banks.

- Understanding Banking

Understanding banks based on the Law of the Republic of Indonesia Number 10 Year 1998, the bank is a business entity that collects funds from the public in the form of savings and channeled to the community in the form of credit and or other forms in order to improve the standard of living of many people. It can be concluded that the bank is a state-owned and private enterprise that has the function and task of banking to collect and channel funds to the community and perform other activities related to finance.

The banking system in Indonesia embraces the principle of economic democracy. The point is that banks do their job with fair and prudent principles. Meanwhile, the objective of the banking system itself is to support the implementation of the economy in Indonesia, to support the national development and to improve the distribution of development, and to oversee economic growth and national stability for the welfare of the livelihood of the people.

- Banking Functions and Tasks

Functions and tasks of banking certainly can not be separated from financial problems. Banks that aim to support the implementation of development and maintain the stability of the economy, has a very complex task. Here are the general banking functions:

1) As a collector of funds

The collector of funds here means that the bank serves to collect funds from the community in the form of banking business such as demand deposits or savings deposits or deposits. But the funds collected not only come from the community, but also from other sources such as funds sourced from capital when setting up banks, and also funds sourced from other financial institutions in the form of loans.

2) As a distributor or lender of the bank

The banking system is not only centered on fund raising, but also the channeling of funds and lending to the public. The funds are not arbitrarily lent, but are disbursed in the form of credit for business purposes. Through this function, the bank will benefit from the profit-sharing program which is usually the main requirement when it will borrow money, or it could be by setting a credit interest.

Unfortunately, this loan has many risks that can be detrimental to the bank. Therefore, the distribution of funds in the form of this credit system must be done very carefully and carefully. If a bank incurs a loss, then the bank will be liquidated or terminated his banking business. In addition to lending, funds can also be disbursed through the purchase of securities.

3) As servants of services

The Bank serves to serve the financial traffic and perform other banking activities such as remittances, credit card making, tourist checks, collection, and various other banking activities.

The banking system also has three other major functions, namely agent of trust, agent of development, and agent of services. The function of agent of trust is the bank as an institution based on trust between the collector of funds and the channeling of funds. Trust is very important to have for banking activities between both parties such as the storage of money and the channeling of money in the form of credit can run smoothly.

The function of agent of development is the bank as an institution that mobilizes funds for economic development activities. These activities include investment, distribution and consumption of goods or services. While the function of agent of services is a bank as an institution that offers services to the community. Services offered certainly associated with banking activities.

In the meantime, here are the functions and tasks of banking in general:

1. Establish and implement monetary policy

a. Establish a monetary target taking into account the current inflation rate

b. Conducting monetary control by way of open market operations in money market (rupiah or foreign currency), determining the discount, establishing minimum mandatory reserves, as well as arranging and financing credit

2. Organize and maintain a smooth payment system

a. Carry out and grant approval or permission for remuneration services

b. Require to prepare and submit activity reports to payment system service providers

c. Setting use of payment tool

Such is the explanation of the history, notions, functions and tasks of banking. Banking activities are activities that can not be separated from the daily life of the community. The presence of banks provides many benefits that are very beneficial not only for the bank itself, but also for the community as well as the state.