<![CDATA[The banking sector holds a strategic role as the driving force of the national economy through intermediary functions connecting fund owners with capital-needing parties. The existence of collateral in credit agreements is a crucial instrument for banks to mitigate the risk of default that could disrupt financial institution liquidity stability. However, the collateral execution process often triggers legal disputes due to the bargaining power imbalance between banks and debtors, particularly regarding transparency and auction price fairness. This article aims to analyze the limits of bank liability and the effectiveness of authority supervision in ensuring legal protection for debtor customers. This research employs normative legal research methods with statutory and conceptual approaches analyzed qualitatively. Primary data are derived from banking regulations, mortgage laws, and financial services authority regulations, while secondary data come from reputable legal literature. The results indicate that bank liability is not only executory but also includes the obligation to maintain the principles of prudence and transparency in determining auction limit values. The effectiveness of legal protection is still hindered by the dominance of standard clauses and weak implementation of market conduct supervision by relevant authorities. Synchronization of regulations between the Financial Services Authority and Bank Indonesia is required to strengthen complaint mechanisms and standardization of fair execution procedures.]]>
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