This research is aimed to evaluate the supervision of Kredit Usaha Rakyat (KUR) in Bank Jatim Cabang Tulungagung and to determine the proper supervision procedures that must be performed to minimize the risk of non performing loans. This research applies descriptive method to examine the case of credit supervision in Bank Jatim Cabang Tulungagung. Focuses in the study are: 1) Non Performing Loans on Bank Jatim Cabang Tulungagung, 2) The supervision of Kredit Usaha Rakyat in Bank Jatim Cabang Tulungagung by preventive and repressive control of credit. The findings showed that preventive and repressive control of credit in Bank Jatim Cabang Tulungagung have performed properly. However, the implementation of preventive control need to be improved because the time allocated to apply the control tend to be limited. Beside, in the repressive control of credit, the bank directly implements liquidation method. The method is supposedly implemented after rescheduling, reconditioning, an restructuring have been applied.