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Case Study

BANK RAKYAT CASE STUDY
Case Summary
Established over a half century ago in September 1954, Bank Kerjasama Rakyat (M) Berhad (Bank Rakyat) was a credit co-operative that provide financial needs to its members. The bank has gone through a lot changes in terms of its management over the years. Subsequent changes in the by-laws has resulted the extension of membership to individuals started in 1967. Another turning point was when the by laws of Bank Kerjasama Rakyat (M) Berhad Act 1978 (Special Provision 202) allows the bank to provide financing to non-members.

In 1993, the bank has become partly Islamic, with the introduction of Islamic banking product at four of its branches. The bank underwent a major transformation from a conventional banking to a full-fledged Islamic co-operative bank in 2002 and became the third bank to offer total Islamic banking products in Malaysia. This has resulted Bank Rakyat to be placed under close scrutiny by Bank Negara Malaysia (Central Bank of Malaysia) under the Development of Financial Act (DFIA). In addition, it also has several authorities that overseeing its operations namely the Ministry of Entrepreneur and Co-operative Development and Co-operative Societies Commission of Malaysia (The Co-operative Act 1993).

Bank Rakyat’s organisational goal has been characterised by its co-operative nature which is to raise the economic well-being of its members by providing financing facilities whilst ensuring a satisfactory dividend returns to them. The bank has 111 branches and a customer base of 700,000 individuals as well 1,200 co-operatives with product offerings and services that include investment/saving, retail financing, insurance, Kad Rakyat, One-Stop Bill Payment Centre, Electronic Banking Centre and Bankcard ATM Services. In a related development, the partnership pact with Takaful Ikhlas, will pave Bank Rakyat venturing into Islamic insurance.

The bank has also built a good branding through the tagline of “the...