<![CDATA[Banks (BPR), and can significantly impact a bank's financial health and business continuity. PT BPR Berkah (Perseroda) Pandeglang experienced a sharp increase in its gross NPL ratio—rising from 7.53% in 2024 to 13.74% as of May 2026—far exceeding the 5% maximum limit set by the Financial Services Authority (OJK). This study aims to analyze the mechanisms for resolving non-performing loans and the factors causing customer default, as well as to provide a legal review of these resolutions based on the Indonesian Civil Code (KUHPerdata) and Law Number 10 of 1998 concerning Banking, as amended by Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK). The study employs an empirical legal research method with a qualitative approach—utilizing interviews, observations, and document analysis—with data validity verified through triangulation techniques. The findings indicate that PT BPR Berkah (Perseroda) Pandeglang resolves non-performing loans through non-litigation channels (persuasive collection, warning letters, and loan restructuring via rescheduling and reconditioning) before resorting to litigation involving collateral execution. Factors causing default in the Working Capital Loan sector include the diversion of funds (*side-streaming*), poor cash flow management, and external business risks; meanwhile, defaults in the Consumer Loan sector are triggered by policies cutting Civil Servant (ASN) Income Improvement Allowances (TPP) and a decline in the debtor's good faith. From a legal perspective, these non-performing loan resolutions align with the principle of *pacta sunt servanda*, the provisions regarding default in the Civil Code, and applicable banking prudential regulations.]]>
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