The principal activity of the banking sector is none other than to support the creation of an optimal allocation of funds in the society. This can only be achieved if society believes that there is a certain degree of safety to their funds when deposited in banks. When people are confident to save in banks, national economy will advance. Therefore, it is important for banks to assure, encourage as well as restore public’s confidence, which can be achieved by providing legal protection for their depositors. There are 2 (two) means of legal protection available for depositors in Indonesia, implicit deposit protection and explicit deposit protection. Implicit deposit protection creates guidelines for bank in carrying out its activities and thus minimizes potential risks to depositors’ fund through laws and regulations. Most of the time, depositors are in a more disadvantaged bargaining position than banks are. This creates inequality between the two legal entities and therefore needs balancing through ratifications of regulations that protect depositors’ interest. On the other hand, explicit deposit protection comes into action in the event of a bank failure through guarantees for depositors’ funds by Indonesia Deposit Insurance Corporation (IDIC)