<![CDATA[This article analyzed the function of the regional development banks (BPD) as anintermediary institution using loan to deposit ratio (LDR) and SBI to deposit ratio (SDR) andfinance efficiency performance with data envelopment analysis (DEA) approach. The data wasduring 2006-2007 covering 26 BPD in Indonesia. The result of study indicated that the regionaldevelopment banks did not play its optimal role as the intermediary institution and efficiencyperformance did not achieve the level of maximum (100%). For getting the optimal functionof banking intermediary and promoting better efficiencies, BPD needed to design some thegrand strategies that could be implemented in the future. They were: the limitation of BPDfunds placing in SBI notes, the cooperation inter BPD, focusing on certain market segmentation,diversification of funds source, and creating local credit guaranteeing institutions]]>
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