There is a difference between a commercial bank and a rural bank, often referred to as BPR. Both have the same function of collecting funds from the community and returning it to the community.

Almost everyone has used the service. Of course, with each goal, however, there are fundamentals and distinct differences between the two types of business entities. The differences between commercial banks and BPR are explained in the following article.

Definition of Commercial Bank

A commercial bank is a bank whose normal activities or syria are based on its principles. This definition is based on the official website. OJK (Financial Services Authority)The activities carried out by commercial banks are the provision of services related to payments. Some of the business activities of commercial banks are as follows:

  • Collecting money from public finances, typically in the form of current accounts, deposits (conditions and warrants), savings, and other forms. which is not much different from savings in the past
  • Granting of credit to fund loan applicants
  • issuance of public and institutional debt acknowledgments
  • Process money transfers of customers and their own benefits.
  • Receive payment of customer bills in the form of securities, along with calculations with third parties.
  • Provide customers with a place to store goods and securities.
  • Carry out custody activities for the benefit of another person according to the specified contract.
  • Proceed with financing from clients which are passed on to other clients in the form of securities. (not listed on the stock exchange)
  • Manage foreign exchange activities in accordance with the rules and regulations imposed by Bank Indonesia (BI) and others.

in Indonesia Banking regulations are stated in Law No. 10 of 1998 that a bank is a business entity whose aim is to collect capital or public money and redistribute it back to the community in the form of credit and or other savings. to increase people’s living standards so that people can exercise their rights Save money so you don’t lose. and stay safe

Definition of Rural Credit Bank

A rural bank (BPR) is a bank whose function is to carry out business activities according to conventional or Shariah principles. Depending on the type, however, not all BPR activities are managed in terms of payment.

Therefore, the activities performed by rural banks are narrower than that of commercial banks. This is because BPR is not authorized to provide deposit services, insurance and foreign exchange activities. The following are typical business activities of BPR:

  • Collecting money from the public treasury, which is generally held in the form of fixed deposits, savings, and other forms that are not very different from these types of deposits.
  • Granting of credit to fund loan applicants
  • Procurement of materials related to costs and deposits according to Sharia principles and provisions from Bank Indonesia (BI).
  • Deposits in various forms such as Indonesian bank certificates, deposits (times and certificates) or similar savings forms at other banks.

Difference Between Commercial Bank and Rural Bank

The banking world in Indonesia is divided into two categories: commercial banks and BPR. The bank itself is a financial services organization and has three main activities, such as helping customers or funding public funds in various ways. financing in the form of credit and financing for entrepreneurs (SMEs) as well as conducting all financial services transactions (domestic and international), including in the trade sector.

After you know the meaning and functions and functions of both. It’s time to learn the differences so you can differentiate them. Here are some of them:

1. Funding requirements

There are differences in funding requirements between commercial banks and BPR as conventional banks. The minimum capital requirement that can be submitted is Rp 3 trillion. While for the Shariah principle it is 1 trillion rupiah.

While the BPR has a smaller capital requirement and is adjusted to four zones in OJK Regulation No. 20/POJK.03/2014, item 5, where BPR funds in zone 4 start with a nominal value of 4. billion rupees while for Zone 1 it is 14 billion rupees.

2. Coverage area

within the boundaries of the area in Indonesia All commercial banks open unlimited branches. starting from the district level to the national level At the same time, BPR is only in the district. This is tailored to the purpose and function of the BPR.

Setting up an office is simple. There are temporary facilities and chairs in the waiting room. While commercial banks have large offices with complete facilities such as toilets and prayer rooms. This is because the purpose of people visiting a commercial bank varies according to the long queue. Therefore, they need adequate facilities.

3. Service

As a traditional business entity and compliant with Shariah principles Commercial banks have more complex tasks and activities. which includes customer insurance Currency exchange service and current account not only that Commercial banks also accept customer complaints through the customer service department of each branch. This, of course, is what makes commercial bank services more diversified, such as managing insurance funds, pensions, and so on.

Meanwhile, BPR is limited to providing only simple services. Because considering the duties and activities of BPR, they only provide credit-related services. including applying for credit credit payment and repayment Therefore, BPR employees are more specific in providing credit or loan-related services.

4. Savings and Loan Services

According to the mission specified in the law No. Banking, No. 10, 1998, that these two types of banks are similar in terms of deposit and credit services. It’s just that commercial banks have more complex services due to their wide variety of functions and activities. Deposit customer service (Saving type call deposit and fixed deposits), investment loans and working capital loans from various customer groups. However, make no mistake, there are many. Banks with high deposit interest rates. So you still have to choose wisely.

At the same time, BPRs are available only in the form of savings and fixed deposits. In terms of loans that are provided, including loans for employees. Small business loans such as equity and unsecured loans. However, BPR does not provide credit cards like commercial banks.

5. Types of business activities

as described Commercial banks have more general functions and activities than those related to public funds. The types of activities typically performed by commercial banks include foreign exchange, clearing, collecting, remittances, issuing notes, etc.

While BPR has business activities to provide services related to deposits. (conditions and certificates), credit or loan, savings, SBI (Indonesian Futures Letters) and money deposits

Here is a complete explanation of the meanings and differences between commercial banks and rural banks which are similar. But there is a clear difference in their duties and business activities in serving the Indonesian people.


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