Banking plays a strategic role in the national economy through the collection and distribution of funds to the public. In carrying out their business activities, banks face various risks that may cause losses and disrupt financial system stability if not properly managed. Therefore, the prudential principle is an essential foundation for conducting banking activities. This study aims to examine the regulation and implementation of the prudential principle in banking activities, as well as the legal consequences for banks that violate it. This study employs a normative legal research method using a statutory approach and a conceptual approach. The legal materials used include banking laws and regulations, regulations issued by the Financial Services Authority (OJK), and literature related to banking law. The results show that the prudential principle is an obligation that must be implemented by every bank, including through credit analysis based on the 5C principles (Character, Capacity, Capital, Collateral, and Condition of Economy), the implementation of Know Your Customer (KYC) procedures, collateral assessment, risk management, internal supervision, and the maintenance of bank soundness. Violations of the prudential principle may result in administrative sanctions, civil liability, and, under certain circumstances, criminal liability in accordance with applicable laws and regulations. Therefore, the implementation of the prudential principle plays an important role in preventing risks, protecting the interests of the public, maintaining the soundness and sustainability of banking operations, and supporting the stability of the national banking system.