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Financial institution is established because traditional villages have an important role. This study aims is to provide knowledge and understanding to the community related to the management of financial institutions known as the Village Credit Institutions (VCI). The legal issues raise the question of the form that application of traditional sanctions “kesepekang” in the settlement of credit at the Village Credit Institution and the legal consequences of it in Bebetin village, Buleleng Regency. The research method is done by interviewing the coaches, supervisors, traditional village administrators and the officers of village credit institution and classified as sociological empirical research. The conclusion that can be drawn from this study are the form of application of traditional sanctions “kesepekang” in the settlement of loans at the VCI Bebetin of Buleleng Regency raises pros and cons because traditional sanctions is contradicted and the application of VCI loans does not give positive impact to the existed law.

Implementation of Indigenous Sanctions “Kasepekang (Exiled)” in Resolving a Credit in Village Credit Institution in Bebetin Village, Buleleng Regency