Financial efficiency performance of regional development bank (RDB) to support regional economy in Indonesia

Regional development bank (RDB) in Indonesia is financial institution in purpose to strengthen regional economy through financial inclusion. It is mandated on Act 13/1962 about main rules of RDB in Indonesia. By the time, RDB get into competition with other banks on financial market yet strive for RDB to have financial efficiency. Therefore, it is needed to increase the competitiveness of RDB and also performing its role as the agent of regional development. This study is going to analyze financial efficiency of RDB in order to influence regional development in Indonesia. We employ panel data method using fixed-effect model for estimation using period of 2002 to 2012. Analysis will also take place on RDB’s performance to meet the mandate of ‘BPD Regional Champion’ (BRC) in order to be agent of regional development in Indonesia.