BACKGROUND

Considering of the ASEAN Economic Community (AEC) is in sight, ready or not, Indonesia should implement the agreement with the community of countries in Southeast Asia region. As a first step, the AEC which came into force in 2015 is already open free trade among its members as well as the banking sector. Banking sector is one of the strategic sectors are needed to sustain the implementation of the ASEAN Economic Community, it is because at that time Indonesia has entered the free market-based economy. For the banking sector, the ASEAN Economic Community will come into force five years since the AEC officially started, specifically in 2020. At the time of implementation of AECs in the banking sector in 2020, bank from other ASEAN countries would be free to enter the banking market in the country.

There are steps that can be taken by Indonesia for the ASEAN Economic Community, that is Consolidation among conventional banks. Consolidation in accordance with the provisions of Article 1 point 26 of Law No. 10 of 1998 on the Amendment of Act No. 7 of 1992 concerning Banking, consolidation in the banking sector are:

"Consolidation of two or more banks, by establishing a new bank and dissolving the banks with or without liquidating".

Banking consolidation is to be considered to make the banks in the country is stronger and compete in ASEAN. Because it has done to other countries in the last 5 years in the face of the AEC.Especially to face the ASEAN Economic Community Indonesia needs to establish a regional scale of bank to improve Indonesia's image in the eyes of ASEAN in addition to sovereign in their own country with the consolidation of the existing banks.

Similarly, the Chairman of the Board of Commissioners Otorits Financial Services (FSA), Muliaman D. Hadad said that bank consolidation has the aim to strengthen the state-owned ‘s banks to face the AEC in the banking sector in 2020. He said, for combining banking with one to another takes a long time. On that basis, the discussion on the consolidation of state-owned’s banks has been done by the FSA since long ago. He believes, with the merger of banking enterprises, the interest rate on banks can be more competitive.

The purpose of the various efforts that have been mentioned previously is to enhance the ability of banks in the ASEAN economic community to become one of the pillars of economic stability to face the free competition in the ASEAN Economic Community, being one of the facilitators for fulfillment of financing needs for businessman who will conducting its business activities during the AEC, strengthen the existence of Indonesia in ASEAN in the field of economy and law enforcement, especially in banking, and with the establishment of a strong banking situation, it will be a positive implications for economy situation in Indonesia.

Thus, based on the observations of economists and some related banking institutions in Indonesia, banking consolidation is considered to be one of the ways in order to banks in Indonesia are Qualified Bank of Asean (QAB) towards Asean Banking Integration Framework (ABIF) 2020. It is because one of the requirements of QAB is banks must have a

capital adequacy ratio or capital adequacy ratio (CAR) in the mount of 19 percent. Consolidation as part of the pace of economic development in the process, to be able to answer the challenges of the future. With the merger of banking enterprises, the interest rate on banks can be more competitiv, and also improve the image of Indonesia in the eyes of ASEAN in addition to sovereign in their own country.

Certainly with the theme "Your strenghten Knowledge in Banking Law as Preparation for the ASEAN Economic Community" that we stretcher, are closely related with business law, especially in banking. However, we give emphasis and specialized banking law doesn’t deviate from the cooperation between the government, state-owned and private, with the goal of strengthening the banking system to face the 2020 AEC certainly with the differences in regulation.

Based on the background above, the Bussiness Law Society (BLS) as a Semi-Autonomus Body in the Faculty of Law, University of Indonesia presents “The 6thBussiness Law Competition 2015, Hafni Sjahruddin Cup” with the theme “Strenghten Your Knowledge in Banking Law as Preparation for ASEAN Economy Community as a medium for law students not only to gain theoritical but also practical knowledge in the area of bussiness law, particularly regarding the banking sector.