SUMMARY
This research utilises the non-parametric frontier approach, Data Envelopment Analysis (DEA) to analyze technical efficiency of the regional development banks (BPD). The data was during 2006-2007 covering 26 BPD in Indonesia. The result of study indicated that the regional of development bank did not achieve technical efficiency at the level of maximum (100%). On avarege, the big-asset of BPD are found to be more efficient than the middle and small asset. The study has important implications such as guiding the BPD policy regarding merger and bank intermediary. Since the study pinpoints the sources of inefficiency , it would also help banks with strategic planning Abstract in Bahasa Indonesia:Penelitian ini menggunakan pendekatan non-parametrik Data Envelopment Analysis untuk menganalisis efisiensi teknis Bank Pembangunan Daerah (BPD). Data yang digunakan selama 2006-2007 yang meliputi 26 bank BPD seluruh Indonesia. Hasil studi menunjukkan bahwa kinerja efisiensi teknis bank BPD belum mencapai tingkat efisiensi optimal 100 persen. Secara rata-rata, bank BPD beraset lebih besar lebih efisien daripada bank BPD beraset menengah dan kecil. Penelitian ini memiliki implikasi penting dalam rangka mengoptimalkan kinerja efisiensi maka bank kecil dan menengah harus melakukan merger dan meningkat fungsi intermediasi perbankan.