The history of Rural Bank (RB) is dates back to 19th Century under the colonial period RB were recog-nized as Bank Kredit Desa (Village Credit Bank), Lum-bung Desa (Paddy Bank), Bank Desa (Village Bank), and Badan Kredit Desa (Village Credit Agency) Rural Bank was legalized by the Banking Act No.7 of 1992. This Banking Act recognizes 2 type of banks: commer-cial banks and rural banks. The term of Rural Bank has been used in three ways that are often not clearly distinguished in descriptions of the RB industry.