Bank Rakyat was established in September 1954 under the Cooperative Ordinance 1948, following an expansion of the cooperative movement in Peninsular Malaysia.
To facilitate the expansion of the cooperative movement, the co-operatives set up their respective union banks provide financial needs to their members.
On 28 September 1954, 11 of these union banks decided to merge and form Bank Agong (Apex Bank)
In 1967, Bank Kerjasama Malaysia Berhad replaced Bank Agong with its membership opened not only to the cooperatives, but also to individuals. Subsequent changes in the by-laws also resulted in the creation of its subsidiary companies and opening of branches to serve customers as well as members.
On 6 January 1973, the name was changed to Bank Kerjsama Rakyat Malaysia Berhad or better known as Bank Rakyat.
Bank Rakyat is governed by its by laws and Bank Kerjasama Rakyat (M) Berhad Act 1978 (Special Provision 202), which allows Bank Rakyat to provide financing to non-members.
In 1989, Bank Rakyat was placed under the Ministry of Land and Co-operative Development and the Ministry of Finance.
In 1993, the Cooperative Act was reviewed which allows the Bank to operate in Sabah and Sarawak.
On 8 May 1993, Bank Rakyat took a giant step towards becoming a syariah co-operative bank by introducing Islamic banking products at four of its branches.
Bank Rakyat became a full-fledged Islamic cooperative bank in 2002. Hence, with this major decision, Bank Rakyat marked another milestone in history where it became the third bank to offer total Islamic banking products in Malaysia.
On 15 February 2002, Bank Rakyat together with six other financial and development institutions were placed directly under the supervision of Bank Negara Malaysia (Central Bank of Malaysia) under the Development of Financial Institution Act (DFIA).
On 27 March 2004, Bank Rakyat was placed under the supervision of the Ministry of Entrepreneur and Cooperative Development.
On 15 April 2009, after the cabinet restructuring, Bank Rakyat was absorbed under the Ministry of Finance and was later placed under the Ministry of Domestic Trade, Co-operatives and Consumerism.
In 2018, Bank Rakyat was placed under the supervision of the Ministry of Entrepreneur Development and Cooperatives (MEDAC) who is responsible in the development of the nation's entrepreneurship and small and medium enterprises (SMEs) industry.
To date, Bank Rakyat has a total of 147 branches offering Islamic banking facilities to its customers.