Legal Reconstruction of Indonesian Banking Laws: Challenges and Opportunities for Digital Bank Regulation

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INTRODUCTION
Banking is one of the crucial elements in the development of the country's economy. The influence of digital transformation has changed the rules in various industries, including the banking industry. 1 This situation has disrupted various banking 54 Varia Justicia Vol. 19 No. 1 (2023) would ask for the customers' data to change them. Then, the perpetrators provided a website address containing an online form and asked the customers to fill out questions about their data. Armed with the data obtained, the perpetrators began to launch their actions by breaking into the victims' accounts and stealing their money. 6 In this incident, it was not only the customers who lost but also the bank and the government. The level of trust (online trust) in digital banks is the key to success of the sustainability of digital banks. Another digital bank problem has also been experienced by the largest e-commerce company in China, which has also developed its digital bank business called MyBank. The concept of MyBank is a fully digital bank with a period of seven years since its establishment in 2015. MyBank has evolved into large banking in China. 7 However, MyBank has also faced a problem in that the Chinese government has conceded the regulation regarding monopolistic practices in the bank's digital payments and only raised problems with anti-monopoly after Alibaba dominated the Chinese market. Reflecting on the above incident, the government must anticipate the risks of implementing digital banks that keep lurking. Regulations regarding digital banks that have not been established have become a legal loophole for the government in protecting the public from legal uncertainty. 8 Many digital banks operate, but only some have received permission from the Financial Services Authority (OJK), and most have not. Legal issues arise from regulations no longer relevant to overshadowing digital banks. The uniqueness possessed by digital banks is an important key in making separate laws relevant to their forms and services. For instance, when the economic crisis hit Indonesia, Islamic banking proved its ability to survive in an economic downturn even though, at that time, there were no regulations to protect the systematics of Islamic banking in Indonesia specifically and perfectly accommodated in Law Number 10 of 1998 concerning banking. Thus, it differs highly from conventional banks, such as applying Sharia principles. The government and Bank Indonesia began to draft a law regarding Sharia banking, later ratified on July 16, 2008, the birth of Law Number 21 of 2008 concerning Sharia banking.
The first research was conducted by Djuwita N. Ghaib in 2019 entitled Legal Dynamics of Digital Banking in Indonesia. Researching the legal dynamics of digital banking arises when banks begin to use Information Technology-based products in services as a substitute for conventional services. This replacement has a positive side in the form of customers being able to transact independently and not having to come to the branch office, on the other hand, this also has an impact on reducing bank branch offices for bank employees. 9 The second research was conducted by Herdian Ayu Andreeena 6 Novina Putri Bestari, "Ramai Bank Digital Di RI Waspada Rampok Hacker Mengintai," CNBC Indonesia, 2021. 7 Bestari. 8 Dina Miryanti Hutauruk, "Aturan Bank Digital Harus Ada Sebelum Bertambah Banyak Pemainnya," Keuangan.kontan.co.id, 2021. 9 Djuwita N Gaib, "Dinamika Hukum Perbankan Digital Di Indonesia," Lex Et Societatis 7, no. 11 (2019): 23-32. Vol. 19 No. 1 (2023 Beru Tarigan and Darminto Hartono Paulus in 2019 entitled Legal Protection of Customers for the Implementation of Digital Banking Services. Mencba examined digital banking services functioned to optimize customer data utilization. The utilization of customer data is intended to serve customers more quickly, easily, and according to customer needs, and can be done independently by customers, the implementation of this needs to pay attention to security aspects including preventive protection and repressive protection. This protection can be carried out with the enactment of the Banking Law and the Consumer Protection Law and OJK Regulations on the Implementation of Digital Banking Services by Commercial Banks. 10 The third research was conducted by Nur Kholis in 2018, entitled Banking in the New Digital Era, which examines conventional banking services that require high costs and fintech (financial technology) which takes the position of banking has not been able to run well. While the difference from this research is that it tries to see whether Law Number 10 of 1998 concerning Banking is still relevant to the implementation of digital banks today. 11 The rapid movement of making special regulations for Islamic banking no longer occurred when digital banks were born and started operating. Digital banks refer to the information technology to perform financial transactions. Hence, it is different from the concept of conventional banks. The rising trend of digital banks is due to several factors, such as a stable and affordable internet connection and the Covid-19 pandemic, causing restrictions on mobility. Law Number 10 of 1998 concerning banking, the only digital bank regulation, is no longer relevant to current digital banks. Digital bank transactions utilize more efficient services called artificial intelligence or AI technology. Digital banks are designed to fully operate digitally to meet customer needs and do not have a physical branch office; they only have one head office. Thus, digital bank regulations must be specifically stipulated in laws. Given that the banking industry is the most regulated institution (fully regulated institution), the existing digital bank regulation is limited to POJK, far from the law and considered insufficient to provide a regulatory power at the level of the act. Establishing regulations of laws can provide certainty and legal force for digital banks and assist the community in a problem that arises in the future. This article aims to observe how is the construction of new banking laws based on the challenges and opportunities of digital bank regulations?

RESEARCH METHOD
This research employed the normative juridical method, a legal research method that bases analysis on laws and regulations relating to the object or problem being 56 Varia Justicia Vol. 19 No. 1 (2023) studied. 12 This study utilized both primary legal materials, such as Law Number 10 of 1998 and Regulation of the Financial Services Authority, as well as secondary legal materials, such as law books and legal journals. The data were obtained by searching the literature and then analyzed using a descriptive-analytical approach.
The research was conducted in two stages, beginning with interpreting the law. Interpretation is a way to find the meaning of statutory regulations. At this stage, the articles in the legislation were interpreted to determine the actual meaning. This stage sought to apply general principles regarding legal interpretation and then interpret them following the principles of legal discovery to realize an interpretation to create justice. The subsequent stage was legal reconstruction, a path in rearranging the legal structure, legal substance, and legal culture for the better. It attempted to rebuild or rearrange ideas or concepts about the law.

Legal Disharmony on Banking Law
Many regulations often can cause problems in terms of quality and quantity. The fairly large number of regulations (overregulated) will certainly affect the quality of the regulations and lead to disharmony, overlapping, and conflicts between regulations. If there is a conflict between regulations or legal conflicts, the cause arises because of legal substance. It is dynamic and complex. Legal substance means all legal principles, legal norms, and legal rules, both written and unwritten. Dynamic means that the law is required to adapt to the development of people's lives, while complex means that the law covers a wide scope of regulation. Emanuela Carbonara and Francesco Parisi, in their article, "The Paradox of Legal Harmonization," state that legal harmonization from sharing conflicting regulations will lead to disharmony. It is the background of the importance of legal interpretation to be carried out, not only legal harmonization. 13 Legal disharmony of Law Number 10 of 1998 concerning banking with digital development is occurring and needs to be resolved. A legal disharmony is an event of inconsistency between two regulations with the same content in the hierarchical order of laws and regulations. Steps in preventing legal disharmony are through legal interpretation and construction, as well as legal reasoning and legal argumentation. Consequently, the disharmony of regulations results in the law being unable to function properly. Prevention of legal disharmony can be carried out by considering existing legal regulations and legal developments.
Disharmony in the act occurs because these regulations are no longer relevant to the times. Regulators often make new regulations but find some provisions contradicting Vol. 19 No. 1 (2023) the previous ones. Law Number 10 of 1998 concerning banking has experienced disharmony throughout the increasingly rapid development of digital banking.

The Term of Fund Channeling
The phrase "fund channeling" was interpreted using a legal textualist approach (focus on text) to understand its textual meaning. Provisions regarding banking functions are regulated in Article 3 of Law Number 10 of 1998 concerning banking, which states, "the main function of Indonesian banking is to collect and distribute public funds" (Table  1). This article is specific by appointing two main functions of a bank: (1) collecting funds and (2) channeling funds. This legal approach implies that the textual meaning of the phrase "fund channeling" is the activity of selling funds collected from the community. The distribution of funds by banks can be carried out because of community participation. It describes the meaning of "community" in this context. The banking law does not define the meaning of the community. Thus, the article can be interpreted that the distribution of funds carried out by banks is an activity of providing funds to the public previously obtained from fund-raising activities. Meanwhile, the public receiving the funds must return them following what has been stated and agreed between the two.
After taking a legal approach using a textual approach, the phrase "fund channeling" was interpreted using an authentic, systematic, and sociological legal interpretation. Authentic interpretation utilizes the limits that the legislator has determined. The phrase "fund channeling" is interpreted in Law Number 10 of 1998 Vol. 19 No. 1 (2023) concerning banking as an activity to channel funds to the public through credit and other forms. The scope of the phrase "fund channeling" in this article is given to commercial banks by dividing it into two forms: credit and financing. Commercial banks carry out the distribution of funds as an obligation. The distribution of funds in banking, intended for the public, is a part of bank service products. Conventional banks call channeling funds as lending, while Islamic banks name it financing.
The phrase "fund channeling" was also interpreted using a systematic interpretation by linking one regulation to another. Law Number 10 of 1998 concerning banking, specifically in Article 1 Number 11, explains that distribution of funds, referred to as credit (lending), is "the provision of money or claims that can be equated with it, based on a loan agreement or agreement". It describes the meaning of the phrase "fund channeling". In short, it refers to borrowing between banks and other parties that require the borrower to repay the debt after a certain period with interest. Meanwhile, POJK No. 12/POJK.03/2021 does not clearly state the phrase "fund channeling" in digital banks because, in the definition, it only mentions digital banks run their business activities" without any further explanation.
Suppose it is broken down based on the credit elements contained in Law Number 10 of 1998 concerning banking. In that case, the elements include (1) trust-the bank believes that the money lent will be returned along with interest according to the agreed period, (2) time-the addition of period, (3) risk-the level of risk that will be faced based on the effect of the period on the achievements received by the debtor and the return agreed, and (4) achievement-an object or something obtained by the debtor if there is an agreement or credit agreement between the bank and the debtor. If the lender and the borrower agree on the credit, it must be stated in a credit agreement.
The banking function is formed with a purpose. Using the sociological interpretation in defining the phrase "fund channeling" has a social purpose by paying attention to societal developments. As contained in the Elucidation of Law Number 10 of 1998 concerning banking, "in order to create a prosperous society based on Pancasila and the 1945 Constitution, the implementation of development must pay attention to harmony and balance in the elements of development, including in the economic and financial fields".
The development of a country cannot be separated from the role of banks in encouraging and strengthening the banking function as agents of development. Thus, banks must support economic improvement toward enhancing people's living standards through credit. Banks are obliged to function as financial institutions in distributing public funds. Banks as intermediary institutions do not merely carry out fund-raising activities. According to Kasmir, banks refer to financial institutions that carry out business activities of collecting funds from the public and channeling these funds to the public, and providing other bank services. 14 Vol. 19 No. 1 (2023) Jenius, the first digital bank in Indonesia, has issued products in savings, transactions, and cards. Over time, the development of digital banks makes them compete in innovation. Some digital banks solely plan to expand their business into credit service products. However, the available services are still limited to raising funds in savings. Although it has been going on for quite a while, it cannot be ruled out, considering that legally, banking has the main functions of its business activities. In short, the operation of a bank under the laws and regulations must fulfill its two main functions. The distribution of funds or credit at digital banks, for example, Jenius, can only be submitted by selected customers. Jenius provides this credit service through "Flexi Cash". This "Flexi Cash" usage model is a standby fund that can only be submitted through the Jenius application. Jenius applies several provisions for late bill payments called a penalty. This penalty has different interest details depending on the delay, calculated based on the day: 1. First month (1 day) IDR. 50,000,-2. Second month (30 days) IDR. 75,000,-3. Third month (60 days) IDR. 150,000,-4. Fourth month (90 days) IDR. 175,000,- 15 However, digital banks providing credit were still limited, one of which was Jenius. As for other digital banks trying to explore credit services, Bank Neo Commerce and Bank Jago have planned to release credit features in their applications in 2022. There was a reason behind it; the two banks have distributed credit through partners (partnerships) with third parties such as fintech and multi-finance. 16 BCA Digital has also developed credit services with a channeling scheme in collaboration with acceleration. BCA Digital has planned to distribute credit in various product variants from short-to long-term tenors. Although some groups have welcomed the idea, it has certainly harmed the philosophy of banking functions if viewed from a legal perspective. Credit distribution should be conducted in bank business activities, inseparable from other functions such as fundraising and other services. According to Kasmir, providing credit has the following objectives: 17 1. Gaining profits in interest. It is a form of remuneration and credit administration fees that customers must provide to banks. 2. Assisting in launching customers' business activities. 3. Assisting the government.
The benefits obtained by the government from the distribution of credit are as follows: 1. Tax revenues from profits received by banks and customers. 2. The opening of job opportunities. 3. Increasing the number of goods and services. 60 Varia Justicia Vol. 19 No. 1 (2023) 4. Increasing the country's foreign exchange in terms of export needs of products financed on credit. 18 As Prof. G. M Verryn Stuart defined, "a bank is an entity that aims to satisfy credit needs, either with its means of payment or with money obtained from other people, anywhere by circulating means of exchange and demand deposits". 19 Thus, a bank is an entity that aims to distribute and provide other services related to meeting credit needs with funds obtained from collecting funds belonging to other people.
Channeling funds through credit is an intermediation function of banks to benefit them. The more funds collected from the public, the greater the distribution of funds. 20 The obligation to channel funds also applies to digital banks. From the legal approach and interpretation in implementing the legal reconstruction of the phrase "fund channeling," it is understood that digital banks do not carry out banking functions as mandated in Law Number 10 of 1998 concerning banking. The aftermath of legal reconstruction using a legal approach and interpretation under Article 3 of Law Number 10 of 1998 concerning banking reveals that this article is inappropriate for application in current digital bank operations. So far, only one digital bank, Jenius, through the "Flexi Cash", has carried out the function of disbursing funds.

The Presence of Branch Office
The phrase "branch office" was interpreted using a legal textualist approach (focus on text) to determine its textual meaning. The provisions regarding branch offices are regulated in Article 1 Number 19 of Law Number 10 of 1998 concerning banking, stating that a branch office is a "bank office directly responsible to the head office of the bank concerned, with a clear address of the place of business". The textual approach unveils that the article is textually general by designating the "branch office" object. After using a legal approach, then, it was interpreted using an authentic legal interpretation, based on the limits put forward by the legislators. Hence, a "branch office" is defined as an office with the same role as the head office in providing customer banking services. The scope of the phrase "branch office" is given to banks as an office formed to conduct business activities by improving economic performance in each region. The next phrase is "responsible," obligated to bear all the activities. According to Burhanuddin, 21 responsibility is the ability to set an attitude toward actions or tasks and take the risk of the actions. The phrase "responsible" has an important function as a form Vol. 19 No. 1 (2023) of a legal relationship between the head office and branch offices. Suppose a common thread is drawn from this phrase. In that case, the branch office continues to carry out operational activities like the head office. Moreover, the responsibility for a branch office is borne both individually and as a legal subject for implementing banking business activities because in carrying out its operations, the branch bank is still led by the head of the office.
A systematic interpretation was applied to define the law based on the phrase "branch office" by linking one regulation to another. Law Number 10 of 1998 concerning banking explains that the opening of a conventional bank branch office must also meet the requirements, encompassing (a) a consolidated financial report detailing the quality of productive assets for the last two months before the date of the application letter, (b) operational preparation plans for the opening of a branch office, and (3) results from the feasibility study containing at least the economic potential, market opportunities, level of fair competition between banks, the saturation level of the number of banks, monthly cash flow projections for 12 months, and branch office work plan for at least 12 months.
When reviewed based on Article 26 of POJK Number 12/POJK.03/2021, the provisions regarding digital bank branch offices are "if Bank BHI, which operates as a digital bank through the establishment of a new Bank BHI, as referred to in Article 25 letter a, will open an office network other than the head office in the form of branch office and functional office conducting activities other than operational, it can provide Electronic Banking Terminal (TPEs)". Branch offices in the article are "offices that carry out service and operational activities to customers by using electronic channels and providing TPE in whole or in part". TPEs in digital banks are grouped into various electronic devices such as Automated Teller Machines (ATMs), Cash Deposit Machines (CDMs), Cash Recycler Machines (CRMs), Electronic Data Capture (EDC), and Self Service Banking Terminals (SSBTs), which aims to serve banking transactions. A branch office is defined as a TPE, where the branch office is in the form of an ATM and the like, which is then referred to as a digital branch office.
The interpretation of the article then cannot be considered based on only one regulation. However, Article 18 of Law Number 10 of 1998 states that the payment point, car cash, and automated teller machines (ATMs) are called other offices under the branch office. Branch offices carry out physical operations, while ATMs and others cannot be called branch offices. Thus, it is clear that regulations at the level of law and lower, such as POJK, often have different interpretations and experience disharmony. The emergence of vertical inconsistencies in regulatory format, where lower laws and regulations conflict with higher regulations (the Lex Superior Derogat Legi Inferiori principle), has made regulations governing banking, especially digital banks, need legal reconstruction. It is a note for regulators to be more careful in regulating existing regulations and form new regulations if needed. 22 62 Varia Justicia Vol. 19 No. 1 (2023) If Law Number 10 of 1998 is used as the basis for forming digital bank regulations, the phrase "branch office" cannot be applied because digital banks are extremely different from conventional banks. Digital banks refer to a technology concept used to carry out banking activities. In other words, digital banks can be defined as a technology that performs the role of banks, a unique combination of technology and financial companies. Artificial Intelligence (AI) technology in digital banks is intended to replace or add value in producing better services by increasing the speed 23 accuracy and efficiency of the system bank performance. 24 Conventional or commercial banks carry out functions or adopt technology to support banking activities. Conventional banks using digital technology and digital banks cannot be equated.
To understand the social objectives of establishing a "branch office," it was interpreted using a sociological interpretation by considering societal developments. As contained in Law Number 10 of 1998 concerning banking, "The role of the national banking system needs to be increased under its function in collecting and distributing public funds by paying more attention to the financing of national economic sector activities with priority to cooperatives, small and medium-sized entrepreneurs, as well as various levels of society without discrimination to strengthen the structure of the national economy. Likewise, banks need to pay greater attention to improving economic performance in the area of operation of each office." The establishment of a "branch office" based on the objectives contained in Law Number 10 of 1998 concerning banking has none other than the function of implementing economic equity, whereas if it is related to the definition of a digital bank that does not have a branch office, it is not following what is contained in Law Number 10 of 1998 concerning banking. In other words, Article 1 Number 19 of Law Number 10 of 1998 concerning banking is incompatible or irrelevant to the current development of digital banks. It is due to the adoption of technological developments by digital banks that have eliminated or changed the definition, function and purpose of branch offices.

The Term Know Your Costomer
The word "analysis" was interpreted using a legal textualist approach (focus on text) to understand its textual meaning. The provisions regarding "analysis" are regulated in Article 8 Point 1 of Law Number 10 of 1998 concerning banking, which states that "In providing credit or financing based on sharia principles, commercial banks are required to have confidence based on in-depth analysis or the intention and ability of the debtor customer to repay the debt or return it following the agreement." The textual approach generally interprets "analysis" as an activity to analyze seriously by the bank. According Vol. 19 No. 1 (2023) to Husein Umar, understanding analysis is a work process from a series of stages of work before research is documented through the writing stage report. 25 After taking a legal approach using a textual approach, the word "analysis" was interpreted using an authentic, systematic and sociological legal interpretation. Authentic interpretation utilizes the limits that the legislator has determined. The word "analysis" was interpreted in Law Number 10 of 1998 concerning banking as an activity carried out by the bank to assess before extending credit to customers. According to Legal Expert Wahyuni, understanding credit analysis is a process of conducting credit assessment by looking at all aspects, including financial and non-financial. 26 Banks must analyze before giving credit to prospective debtors. As explained in Article 8, the bank must carefully assess the debtor's customer's character, ability, model, collateral, and business prospects to obtain confidence. Furthermore, the assessment in question is an in-depth intention analysis called credit analysis. Banks must consider several things related to good faith (willingness to pay) and the ability to pay loans and interest. Article 2 of Law Number 10 of 1998 concerning banking stipulates that banks carry out their business activities based on economic democracy using the precautionary principle. The principles of prudence, or so-called prudential banking, must be contained in all banks in Indonesia.
Moreover, the principles of character, capacity, capital, collateral, and condition (5C) as well as personality, party, purpose, prospect, payment, profitability, and protection (7P) are part of the prudential principles implemented through accurate and indepth analysis. The prudential principles are the realization and fulfillment of the principles of economic democracy as the basis for banking in conducting business activities. The word "analysis" was also interpreted using systematic interpretation by linking one rule to another. Before the credit is given, the credit analyst should perform a credit analysis first. This credit analysis is based on the 5C and 7P principles. 27 Concerning the 5C principles, (1) character is the personality characteristics of the person given credit; (2) Capacity is the ability of prospective debtors to repay loans (credit); (3) Capital means funds owned by prospective debtors to develop their business; (4) Collateral means wealth used as collateral for loans obtained; (5) Condition of the economy affects the debtor's business activities to calculate future economic conditions. Subsequently, regarding the 7C principles, (1) personality refers to the characteristics of the prospective debtors (personal self, education, family, experience, work, hobbies, social standing or association in society); (2) Party means group or classification of debtors based on capital, loyalty and character; (3) Purpose is the purpose of applying for credit; (4) Prospect means the bank's assessment of the customers' business, judging by the prospect of whether it will generate profits; (5) Payment means measuring the 64 Varia Justicia Vol. 19 No. 1 (2023) customers' steps in returning credit; (6) Profitability refers to the customers' expertise in generating profit; (7) Protection is efforts to protect the credit and get protection through goods or insurance guarantees. 28 Systematic interpretation compares the credit analysis process contained in Law Number 10 of 1998 concerning banking with the Regulation of the Financial Services Authority (POJK). Conventional commercial banks are carried out using a checking on the spot (COS) or the spot inspection system by account officers. Account officers are crucial in the credit analysis process. It is performed to make credit expansion profitable and not detrimental to the banks. COS is carried out to obtain data on the type of business owned by the prospective debtors to obtain a profit margin. Then, the profit margin results are combined with the interview results with the prospective debtors, and the account officer will assess the collateral that the prospective debtors will submit to the bank. If any doubts are found, re-verification will be carried out on the results of the taxation report, and if the report is approved, it will be submitted to the head of the branch/subbranch office. Conventional banks usually use this flow in credit analysis by credit analysts. The importance of the checking on-the-spot process, in this case, is to ensure the data with the actual conditions provided by the prospective debtors is correct and appropriate. In addition, there is "trade checking" carried out by credit analysts simultaneously with checking on the spot. The function of trade Checking is to assess prospective debtors in carrying out their business activities directly. Checking on the spot and trade checking cannot be ignored because, in every credit analysis process, there is a content of each principle contained therein. 29 Unlike the case with digital banks, the use of AI and big data in processing data to perform banking services integrated into the credit analysis system certainly has its positive and negative sides. Digital banks adopt technology in both the model and the implementation of business activities, including the credit analysis process. Although, until now, digital banks operating in Indonesia have only planned to issue credit services, the use of AI and big data is projected to result in a more accurate and non-biased credit score. 30 Nevertheless, when viewed using the regulations contained in the Banking Law and provisions under laws such as POJK No.42/POJK.03/2017 concerning obligations to prepare and implement credit or bank financing policies for commercial banks, credit or financing analysis states that credit analysis must be carried out in writing by applying accurate and objective credit principles to minimize credit risk. According to Fikri, "no matter how great digital technology is, understanding risk is the main thing, so the customers' character is the most important factor". 31 Thus, it is clear that regulations in laws with community development or community behavior often experience disharmony. If Law Number 10 of 1998  19 No. 1 (2023) concerning banking is used as the basis for the formation of digital bank regulations, then Article 8 of Law Number 10 of 1998 concerning banking must be corrected in terms of the method applied in the analysis because the risks present will be much more serious, greater than the risk of using conventional methods. Furthermore, implementing the principles of credit and financing and applying the precautionary principles contained in each stage of lending still underlies the basis of lending even though it employs the role of digital technology in its implementation. 32 By understanding the social objectives in the article and explanation of Law Number 10 of 1998 concerning banking using sociological interpretation, the social purpose of conducting this credit analysis is to convince the bank that the prospective debtors are truly trustworthy. The bank will bear greater credit risk if it does not perform credit analysis. Thus, this analysis will foster a sense of trust from customers in banking and vice versa. This trust is the basis or foundation for banking in carrying out banking functions because collecting and distributing funds to the public will encourage national economic growth as mandated in Pancasila and the 1945 Constitution. In short, Article 8 Number 1 of Law Number 10 of 1998 concerning banking is irrelevant to the current development of digital banks. The adoption of technological developments by digital banks has eliminated or changed the concept of credit analysis. Conventional banks attach conventional values such as checking on the spot and trade checking in the credit analysis process. If it is replaced with technology, it will shift the role of human understanding of risk. Although no matter how sophisticated and great the technology, it will be unable to replace the role of humans because, at every stage in credit analysis, credit principles are inseparable from one another. 33 Legal interpretation methods were utilized to give meaning to statutory regulations. Sudikno Mertokusumo and Pitlo argued that interpretation is a method of legal discovery that provides a clear explanation of the text of the law so that the scope of the rules is in line with the occurrence of certain events. Others are complementary. Each method has its characteristics, so there is no basis or guide for determining which method should be used in a case. 34 This study employed several legal interpretations to understand and carry out legal reconstruction of the laws under study. According to Gadamer, interpretation is the process of understanding something or vice versa. Thus, within the scope of the law, it is by interpreting the law to understand it. The law can only be understood through interpretation so that a person can find the true meaning of the law. 35 Vol. 19 No. 1 (2023) Legal discovery, when viewed widely, can be performed by judges, lawmakers, and legal researchers. Judges conduct legal discovery to resolve a concrete or conflict event. The results of their legal discovery have binding power, are poured into a decision, and can be used as a reference for legal sources. Moreover, lawmakers perform the legal discovery even though they do not encounter concrete events or conflicts like judges. However, the results of their legal discovery can be used in solving abstract events (have not happened yet but can happen in the future), termed as prescriptive. The results of legal findings are called laws because they are stated in laws and become sources of law. Unlike the case with legal researchers, making the legal discovery is theoretical, not a law produced but a source of law in doctrine. 36 This study conducted legal interpretations for legal discovery, with the statutory system and social problems as the starting points. The law does not always answer the problems. Thus, its interpretation aims to become a proposal in the settlement or a guideline in legal discovery. The interpretation of Law Number 10 of 1998 has been guided by other regulations and the increasingly complex dynamics of digital banking development, which requires legal reconstruction. Legal interpretation, in this case, utilizes the principles of legal discovery and different methods of legal interpretation in each article. As explained earlier, this interpretive activity cannot be limited to only one method but rather tries to understand other methods of legal interpretation and the principles of legal discovery under the disharmonized articles. Ultimately, the banking law is deemed obsolete and it is necessary to amend this law to become a new banking law which facilitating the development of digital banks as a future of banking in Indonesia.

CONCLUSION
In conclusion, the enactment of Law Number 10 of 1998 concerning banking is irrelevant and incompatible with the development of digital banks. This research unveiled that in Law Number 10 of 1998 concerning banking, after legal reconstruction using an authentic, systematic, and sociological (theological) approach and legal interpretation, Article 3, Article 1 Point 19, and Article 8 Point 1 experienced the legal disharmony of the current definition and development of digital banks, described in detail in several issues. (1) The main function of banking, namely the distribution of funds, has not been fully implemented by digital banks because only one digital bank carried out the function of disbursing funds, Jenius, through Flexi cash services. (2) The phrase "branch office" has experienced inconsistency between Law Number 10 of 1998 concerning banking and POJK and the concept of digital banks, which only has one head office or physical office. The adoption of technological developments by digital banks has eliminated or changed