Abstract
The study aims to measure bank soundness of rural bank or micro bank (BPR) and its branches in East Java;to compare efficiency rate among the rural bank branches; and to test a correlation between the bank soundness and the efficiency rate of the branches. The bank soundness measurement is adopted from Central Bank criteria of CAMEL (Capital, Asset Quality, Management, Earning, and Liquidity) whereas the efficiency rate is measured by DEA (Data Envelopment Analysis) method. The correlation is tested using Spearman’s correlation. The results show that rural bank and its branches perform good in the bank soundness; however, the branches present less efficient performances. Statistical test suggests that there is no significance correlation between the bank soundness and the efficiency rate. Keywords: rural bank, mico bank, bank soundness, bank efficiency, DEA, CAMEL, Spearman’s correlation.
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