Implementation of Collateral Auctions in Handling Non-Performing Financing at Bank Syariah Indonesia Area Collection Bandung

Abstract

The growth of Islamic banking financing increases the need for effective mechanisms to resolve non-performing financing while protecting the rights of all parties. Previous studies mainly discuss restructuring, legal aspects, or collateral settlement in general, while detailed evidence on operational auction implementation at the area collection level remains limited. This study analyzes collateral-auction implementation, identifies implementation barriers, and describes the strategies used by Bank Syariah Indonesia Area Collection Bandung. A descriptive qualitative normative-empirical approach was used. Data were obtained through in-depth interviews with three key informants, direct observation, documentation, and review of relevant regulations, and were analyzed through data reduction, data display, and conclusion drawing. The findings show nine sequential stages, from early monitoring and restructuring to post-auction settlement. The main barriers involve administrative and legal completeness, market conditions, and customer socio-psychological factors. The institution responds through document control, coordination with the State Assets and Auction Service Office, asset reappraisal, digital marketing, legal assistance, and a humanistic approach. The novelty lies in an integrated operational description of the auction process, barriers, and mitigation strategies at the area collection level.