Bank Liability as Trustee in Banking Insolvency

Introduction to The Problem: A trustee agreement is an exclusive agreement in banking gives the bank the right and authority to manage the customer's assets as stated to the agreement The assets of trust assets are the property of the customer, the management of the assets must be separately carried out to implement the Prudential Principle and Pacta Sunt Servanda in banking contract. Purpose/Objective Study: Research and analyze the legal consequences of the trustee agreement and analyze the bank liability towards the insolvency status to the trustee agreement. Methodology/Approach: This Legal Research used normative positivism with the using of the Statute and Conceptual Approach. The Legal Research Sources divided into primary to the tertiary source. Findings: The research shows that the Bank is only as the manager of the asset; therefore, every legal conduct shall have approval from the Settlor under the trustee agreement. It means, if the assets are included as insolvency assets, it is a violation of contract as well as law where the dispute settlement shall be taken into account. Paper Type: This Research is Reseach Article completed by rules and regulations.