Article

The effects of conventional interest rates and rate of profit on funds deposited with Islamic banking system in Malaysia

January 2000

Authors:

Universiti Sultan Azlan Shah, Perak

Error Correction Model Analysis in Measuring the Effect of Bank Internal Factors on Mudharabah Deposits for Islamic Commercial Banks

Article

Full-text available

Dec 2021

Islamic bank products to raise public funds can be in the form of demand deposits (wadiah), savings (mudharabah), and deposits (mudharabah). One of the profit-sharing rates in Islamic banks comes from internal factors, namely Return on Assets, Capital Adequacy Ratio, Financing to Deposit Ratio, and Operational Expenses Operating Costs. This study will examine the effect of bank internal factors on mudharabah deposits of Islamic commercial banks using an econometric model, namely the error correction model. Findings. The results showed that the bank's internal variables had a significant effect on mudharabah deposits both in the short and long term. Variables Return on Assets, Capital Adequacy Ratio, and Operational Expenses Operational costs both short and long term have a negative effect on mudharabah deposits.

Analisis Pengaruh Kebijakan Bank Konvensional terhadap Tingkat Keuntungan Bank Syariah

Article

Full-text available

Nov 2021

Perkembangan perbankan syariah di Indonesia sangat pesat beberapa tahun belakangan ini. Namun, market share perbankan syariah masih jauh di bawah harapan. Kajian-kajian teori sebelumnya menyatakan bahwa lingkungan persaingan antar bank, dalam hal ini bank konvensional dan bank syariah, sangat mempengaruhi kinerja bank syariah. Penelitian ini ingin mengetahui bagaimana pengaruh kebijakan bank konvensional yang digambarkan dengan tingkat suku bunga (SB) terhadap keuntungan bank syariah yang digambarkan dengan Return on Assets (ROA). Metode analisis yang digunakan adalah Vector Autoregressive (VAR) dengan tambahan analisis Impulse Response Function (IRF) dan Variance Decomposition Analysis (VDC). Hasil analisis menggunakan VAR (1) menyatakan bahwa terdapat pengaruh negatif signifikan pada ) jika terjadi shock pada tingkat suku bunga tabungan bank konvensional (SB). Kondisi ini sejalan dengan hasil penelitian Haron dan Ahmad (2000); Haron (2004), serta Zainol dan Kassim (2012) yang mengemukakan bahwa apabila tingkat suku bunga tabungan bank konvensional meningkat, maka nasabah bank syariah akan beralih ke bank kovensional yang dianggap memberikan keuntungan lebih besar, sehingga keuntungan bank syariah mengalami penurunan. Hasil ini menunjukkan bahwa tidak semua konsumen bank syariah merupakan konsumen yang loyalis, perbankan syariah dituntut bertindak rasional, yaitu dengan cara menetapkan tingkat bagi hasil yang kompetitif terhadap tingkat suku bunga bank konvensional.

Factors Affecting Profit Distribution Management of Islamic Banks: Moderating Role of Corporate Governance

Article

Full-text available

Oct 2021

This study aimed to ascertain the factors that affect the Profit Distribution Management (PDM) practices employed by Islamic banks (IBs) to retain their market share. It further analysed whether the presence of Islamic corporate governance can smoothen the profit sharing mechanism followed by the IBs. The study utilized the panel data analysis technique to analyse the data collected from 40 full-fledged IBs for the period 2010-2017 from three different regions, that is, South Asia, Middle East and South East Asia. The findings of the study support the premise that third party funds, asset composition, capital adequacy and market share all have a significant and positive impact on the PDM practices of IBs. Moreover, Islamic corporate governance strengthens the relationship between market share and the PDM practices of IBs. The results of this study have policy implications for the regulators of IBs and financial institutions as they provide insight into the factors that affect the PDM practices of IBs.

Brand familiarity vs profit-sharing rate: which has a stronger impact on Muslim customers’ intention to invest in an Islamic bank?

Article

Full-text available

May 2021

Purpose The purpose of this study is to examine the impact of brand familiarity and profit-sharing rate on Muslim customers’ brand trust, perceived financial risk, perceived value and intention to invest in an Islamic bank. Design/methodology/approach A between-subjects experimental design was applied in the study. Six experiments involving two brand familiarity levels and three profit-sharing rates were conducted using a total of 217 samples. Randomization was applied in the study, which generated unequal sample sizes for each group of experiments. Findings The findings of this experimental study demonstrated that Muslim customers’ familiarity with the bank’s brand has a significant impact on their brand trust and intention to invest in an Islamic bank. The study also found that the profit-sharing rate has a significant impact on the perceived value both with and without interaction with brand familiarity. Research limitations/implications The current study applies an independent measured design or a between-subjects experimental design, that resulted in unequal sample sizes. In addition, the study also does not control for the types of bank accounts owned by respondents. The design may invite the presence of confounding variables that exist due to individual differences and environmental variables. Practical implications The results show that Islamic bank managers should care about the brand familiarity issue, which strongly influences customers’ brand trust and customer intention to invest in an Islamic bank. In addition, Islamic bank managers should pay attention to the profit-sharing rate given to customers, as it interacts with brand familiarity in influencing customers’ perceived value. Originality/value This study examined the impact of brand familiarity and profit-sharing rate on Muslim consumers’ brand trust, perceived risk, perceived value and intention to save in an Islamic bank. The paper provides a shred of empirical evidence to the theoretical relationship between the subjective and objective cues that influence the formation of customers’ trust, perceived financial risk, perceived value and intention in the Islamic bank context.

Impact of Fund Sourcing on the Financial Performance and Profitability of the Non-Bank Financial Institutions in Bangladesh

Article

Full-text available

Feb 2024

Muhammad Abdul Aziz

Financial institutions (FIs) manage funds to ensure sustainability and provide a return to their stakeholders such as shareholders, depositors and other financiers. Fund management efficiency, the asset side of the balance sheet, might contribute to the performance and profitability of FIs. However, as a highly levered industry, the FIs collect the majority portion of their capital from different sources and costs of funds where riskiness of capital varies based on those sources. This study aims to unveil whether these sources of funds can impact the performance of the FIs. The study has been conducted on 19 listed non-bank financial institutions (NBFIs) in Bangladesh on their data of 10 years. Three sources of funding i.e. equity, deposit and fund from other sources, have been considered as explanatory variables whereas loan, lease and advances, interest revenue, net profit, operating profit and some other performance ratios have been considered as dependent variables. The analysis confirmed that equity, although it doesn't have a significant impact on the composition of asset size, significantly and positively impacts performance and profitability. On the other hand, fund from deposit and fund from other sources significantly impact asset size but their impacts on profitability vary depending on different parameters. This study offers insights for the NBFIs to look into the ways to increase their profitability while for the regulators to take proper policies for the financial sustainability of this sector.

EFFECTS OF INTEREST RATE (RIBĀ) ON ISLAMIC BANKS & ECONOMY

Article

Full-text available

Sep 2022

The structure of almost all economies today is based on interest rates, which is the essential determinant of savings and investment according to classical, neo-classical, and contemporary economists. Therefore, the purpose of this paper is to examine the effect of interest rates on savings and investment, and its influence on the performance of Islamic banks. The study adopts library research and conceptual approach as the method of analysis. Furthermore, the authors have reviewed a significant body of relevant studies written on various aspects of profit and interest, to assess the effects of interest rates on Islamic banks and economy. The results imply that Islamic banks are exposed to interest rate risks while conventional banks are not affected by this, which negatively affects their performance. Meanwhile, the results reveal that there is a negative impact of interest rates on savings and investment which, to some extent, brings economic destabilization. The results of this study may have some substantial implications for economic growth in Muslim and non-Muslim countries. It also provides a platform which facilitates the understanding of saving and investment from the Islamic perspective, and solutions for the existing obstacles in Islamic economics.

Tracing the asymmetry of religiosity-based loyalty of Islamic bank depositors

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Full-text available

Jan 2023

Religiosity is one of many essential aspects that stands as the motivation of people’s behaviour. Its importance expands to the field of banking, especially Islamic banks that take Islamic teaching as their backbone. This study aimed to seek religiosity motivation among Islamic bank depositors by exploring the possible asymmetric effect of interest rates on the type of deposits. By using the NARDL approach, this study investigates the relationship between the conventional deposit interest rate on the type of depositors and deposit maturity by using monthly data from April 2015 until March 2020 of Indonesia’s Islamic banks. The results show that government deposit in Islamic bank is not affected by the raise of interest rate. In addition, all deposits that showed the possibility of asymmetry effect indicated that the increase of interest rate (LIR+) has a positive coefficient. In general, Indonesian Islamic bank depositors’ are religiously loyal and not attracted to the fluctuation of interest rates. The result also found that short-run asymmetric dynamics show convergent to long-run asymmetry after an average of 15 months. As for the policy implications, stakeholders must ease the regulation of Islamic banks such as the conversion of conventional banks to Islamic banks, since it is proven that customers are mainly religiously driven.

DETERMINANTS OF CUSTOMER DEPOSITS IN THE BANKING SECTOR LISTED ON INDONESIA STOCK EXCHANGE

Article

Sep 2022

The customers deposits are a matter to be considered by the bank. With the tendency of this declining customer deposits raised the question, what factors have influenced the declining of the customer deposits. Looking at the previous research and facts in the field, it is assumed that the influencing factors are the people income, the state debt securities, the interest rates and the company size. This study aims to examine and analyze the effect of people income, state debt securities, interest rates and company size on customers deposits. This research method is a quantitative method. Further, the datas are analyzed by using multiple linear regression model. The population in this study are all the banks listed at the Indonesian Stock Exchange during the period of 2013-2019. Samples are taken by using purposive sampling, obtained 33 companies. The result of this research showed that people income, interest rates, state debt securities and company size have effect on customers deposits, so it is useful for banks to see the influence of each of the above factors that can affect changes in deposit funds in banks and to take policies based on the factors above. Keywords: people income, state debt securities, interest rate, company size, customers deposits ABSTRAK Simpanan nasabah merupakan hal yang harus diperhatikan oleh bank. Dengan kecenderungan menurunnya simpanan nasabah tersebut menimbulkan pertanyaan, faktor apa saja yang mempengaruhi penurunan simpanan nasabah tersebut. Melihat penelitian-penelitian sebelumnya dan fakta-fakta di lapangan, diduga bahwa faktor-faktor yang mempengaruhinya adalah pendapatan masyarakat, surat utang negara, tingkat suku bunga dan ukuran perusahaan. Penelitian ini bertujuan untuk menguji dan menganalisis pengaruh pendapatan masyarakat, surat utang negara, suku bunga dan ukuran perusahaan terhadap simpanan nasabah. Metode penelitian ini adalah metode kuantitatif. Selanjutnya data dianalisis dengan menggunakan model regresi linier berganda. Populasi dalam penelitian ini adalah seluruh bank yang terdaftar di Bursa Efek Indonesia selama periode 2013-2019. Sampel diambil dengan menggunakan purposive sampling, diperoleh 33 perusahaan. Hasil penelitian menunjukkan bahwa pendapatan masyarakat, suku bunga, surat utang negara dan ukuran perusahaan berpengaruh terhadap simpanan nasabah, sehingga berguna bagi bank untuk melihat pengaruh dari masing-masing faktor di atas yang dapat mempengaruhi perubahan dana simpanan pada bank, dan mengambil kebijakan berdasarkan faktor-faktor di atas. Kata kunci: pendapatan masyarakat; surat utang negara; tingkat bunga; ukuran perusahaan; simpanan pelanggan

Interest rate volatility and financing of Islamic banks

Article

Full-text available

Jul 2022
PLOS ONE

Despite a direct ban on charging interest, interest-based benchmarks are used as a pricing reference by a majority of Islamic banks, due in part to the absence of stable and widely- published alternatives. Benchmarking interest rate exposes Islamic banks to the problems of conventional banks, particularly the interest rate risk. Against this backdrop, the present study empirically examines the dynamic linkage between the interest rate volatility and the financing of Islamic banks. The empirical analysis is carried using evidence from the Islamic banking industry of Pakistan during the time period 2006–2020. The multivariate Johansen and Jusiles Co-integration test and Vector Error Correction Model (VECM) are used as the baseline econometric models. Moreover, the DCC-GARCH model is employed for robustness and ensuring the consistency of results. The results indicate that a significant long-term and short-term relationship exists between the interest rate volatility and the financing of Islamic banking industry providing significant evidence for co-movements and convergence. These findings suggest that paradoxical as it may seem, the financing of Islamic banks operating within a dual banking system is subject to interest rate risk, mainly due to benchmarking interest rate, which in-turn makes Islamic banks vulnerable to the rate of return risk and withdrawal risk. Moreover, corporate financing, in particular, is more vulnerable to interest rate risk.

The Determining Factors in Influencing Customer’s Loyalty: A Financial Approach

Article

Full-text available

Dec 2021

Hanafi Syafiq

The research aims to evaluate customers’ loyalty to Sharia banking related to internal and external factors of the financial performance approach. A loyalty is depicted with Third-Party Savings deposited in Sharia banking. This study employed Autoregressive-Distributive Lag (ARDL) to explore the short period and the long period from variables’ relationships. The findings reveal that profit-sharing, administration fee, the interest rate of a conventional bank, inflation, and the total number of accounts (NOA) had significant effects on Third-Party Saving (TPS). They imply that the customer’s loyalty is internally established if there is a higher profit sharing in savings, lower administration fees, and total supplementary accounts. Yet, it is formed by external incentives, i.e., a lower interest rate of conventional banking and inflation.

THE ISLAMIC VS CONVENTIONAL BANKS: AN EVIDENCE ON THE ECONOMIC DEVELOPMENT

Article

Full-text available

Jun 2021

This paper highlights how financial and conventional bank system contribute to economic growth. As the Islamic banking system is grounded on shariah’s laws and Usury/RIBA (interest) are prohibited in Islam so there will be no tax shield in this banking system and they have to pay more tax as compared to the conventional banking system. By analyzing their performance and using the gross value-added contribution of both banking systems was observed. Six banks are selected for this purpose of which 3 Islamic banks i.e. Dubai. It is quantitative research so different ratios are used to examine both banking system performance and gross value added to give us information that to what extend both banking systems are contributing to the economy. In an examination, it has been exposed that both banking systems are conducive much to economy as conventional banks are developed their infrastructure is bigger than Islamic banks where Islamic banks just start near past a few years back.

Comparative Study of Griya Hasanah Product Usage and Interest Rate Impact at Bank Syariah Indonesia KCP Batam Raden Patah: Studi Komparatif Penggunaan Produk Griya Hasanah dan Perubahan Suku Bunga di Bank Syariah Indonesia KCP Batam Raden Patah

Article

Full-text available

Sep 2024

The Griya Hasanah product is a home installment financing option offered by Bank Syariah Indonesia, designed to facilitate customers in purchasing a house through credit payments. This study aims to determine whether there is a difference in the number of customers using the Griya Hasanah product each month and to assess whether interest rates have an impact on the number of customers. The research method used is quantitative, with data collection techniques involving secondary data provided by Bank Syariah Indonesia KCP Batam Raden Patah. Data analysis was conducted using linear regression tests and one-way ANOVA tests. Based on the data analysis, the first conclusion drawn is that there is no significant difference in the number of customers using the Griya Hasanah product. The second conclusion is that changes in interest rates do not have a significant impact on the number of customers using the Griya Hasanah product.

The exposure of participative banks to changes in interest rates : Its emergence, impacts and potential measures to address them

Article

Full-text available

Mar 2024

Abstract The specificities of participative banks expose them, not only to traditional credit, market and operational risks, but also to risks of a unique nature. Although their mode of operation is not based on interest rate, several studies have demonstrated that participative banks are susceptible to fluctuations in market interest rates. The balance sheet structure, customer behavior, the absence of a refinancing market specific to participative banks and the shortage of sharia-compliant hedging instruments, increase their exposure to interest rate risk and make its management more complex. The objective of this paper is to provide answers to the problematic of exposure of participative banks to interest rate risk. To do this, we will adopt a theoretical approach based on a literature review, allowing on the one hand, to study the extent to which Moroccan participative banks may be impacted by changes in market reference rates, on the basis of the experience of participative banks operating in countries with a dual banking system and an underdeveloped or nonexistent Islamic financial market. Furthermore, we will illustrate the various practices and techniques developed to manage this risk. We intend to initially investigate this issue, its potential effects, and the various measurement and management techniques that can be employed to mitigate it. And subsequently, to present the best management practices that Moroccan participative banks, considering their specificities, can implement with the aim of addressing their exposure to such risk. Our study states that Moroccan participative banks are exposed to an extrinsic interest rate risk due to their operational environment. Despite their exposure, they lack the same flexibility as conventional banks when it comes to managing the potential impact on their financial situation. The recommendations provided in this paper focus notably on innovation and financial engineering in Sharia-compliant hedging financial instruments, the implementation of a reserve policy for risk management, and financial market education. Résumé Les spécificités des banques participatives les exposent, en plus des risques classiques de crédit, marché et opérationnel, à des risques de nature unique. Bien que leur mode de fonctionnement est excepte du taux d'intérêt, plusieurs études réalisées ont démontré que les banques participatives se trouvent exposées aux fluctuations des taux d'intérêt du marché. La structure bilancielle, le comportement de la clientèle, l'absence d'un marché de refinancement propre aux banques participatives et la pénurie des instruments de couverture conformes à la charia, favorisent davantage leur exposition au risque de taux d'intérêt et rendent sa gestion plus complexe. L'objectif du présent article est d'apporter des éléments de réponse à la problématique de l'exposition des banques participatives au risque de taux d'intérêt. Pour ce faire, nous utilisons une approche théorique basée sur une revue de littérature, permettant d'une part, d'étudier dans quelles mesures les banques participatives marocaines pourront être impactées par les variations des taux de référence du marché, en se basant sur l'expérience des banques participatives exerçant dans des pays caractérisés par un écosystème dual et un marché financier islamique sous développé ou inexistant. Et d'autre part, de présenter les diverses pratiques et techniques développées pour gérer ce risque. Nous nous proposons d'étudier, dans un premier temps, cette problématique, ses effets potentiels et les différentes techniques de mesure et de gestion pouvant être utilisées pour en faire face. Et de présenter, par la suite, les bonnes pratiques de gestion que les banques participatives marocaines, tenant compte leurs spécificités, peuvent mettre en place dans l'objectif d'atténuer leur exposition audit risque. Notre étude affirme que les banques participatives Marocaines se voient exposées à un risque de taux d'intérêt extrinsèque suite notamment à l'environnement dans lequel elles exercent. Toutefois, elles n'ont pas la même souplesse que les banques conventionnelles pour gérer ses répercussions potentielles sur leur situation financière. Les recommandations apportées dans cet article portent notamment sur l'innovation et l'ingénierie financière en matière des instruments financiers de couverture conformes à la charia, la mise en place d'une politique de réserve pour la gestion du risque ainsi que l'éducation financière du marché.

Perceptions of Young Customers Towards Islamic Banking Products and Services in Sylhet

Article

Jun 2023

Analisis Rasio Likuiditas untuk Mengetahui Pengaruh Corona pada Kinerja Keuangan Perbankan Syariah di Indonesia

Article

Full-text available

Apr 2023

Penelitian ini untuk mengetahui pengaruh Corona terhadap kinerja keuangan Perbankan Syariah di Indonesia dengan Rasio Likuiditasnya. Rasio likuiditas yang digunakan, yaitu Current Ratio, Quick Ratio, Cash Ratio. Penelitian ini menggunakan metode penelitian kuantitatif. Penelitian ini menggunakan sampel 3 jenis Bank Syariah di Indonesia, yaitu Bank Central Asia (BCA) Syariah, Bank Syariah Indonesia (BSI), dan Bank Muamalat. Teknik analisis data menggunakan analisis rasio likuiditas. Hasil perhitungan rasio likuiditas BCA Syariah menunjukan Current Ratio, Quick Ratio, dan Cash Ratio tahun 2018-2020 mengalami penurunan, tahun 2021 menurun drastis setelah sekitar 1 tahun pandemi Corona. Hal ini menunjukan kinerja keuangan BCA Syariah mengalami penurunan, pengaruh Corona. Hasil perhitungan rasio likuiditas BSI, menunjukan tahun 2018-2020 mengalami kenaikan dan tahun 2021 mengalami penurunan..Hal itu menunjukan BSI di awal pandemi kinerja keungannya belum terpengaruh Corona. Baru setelah sekitar 1 tahun pandemi (tahun 2021), kinerja keuangannya mulai menurun. Rasio likuiditas.Bank Muamalat menunjukan bahwa semua nilai rasio likuiditas dari tahun 2018-2021 mengalami kenaikan. Hal ini menunjukan kinerja keuangan Bank Muamalat tidak terpengaruh Corona

Digital Leadership in Education: A Meta-analysis Review

Chapter

Full-text available

Mar 2023

This article provides a complete summary of leadership theory based on empirical research papers that focus primarily on educational leadership styles. We focused on the following categories in our meta-analysis: (1) the role of leadership, (2) the influence of leadership on academic institutions, and (3) the research method for leadership. Our findings imply that it is worthwhile to investigate new models of leadership that can better match the student development with the requirements of an increasingly digitalized business world. In this paper, we suggest an exploratory sequential design study of digital leadership and provide a new definition of digital leadership. This is owing to the lack of methodological specificity in the existing leadership studies academic literature.KeywordsDigital leadershipMeta-analysisStyles of leadershipEducation sector

Accounting for Climate Change in Light of the IFRS Foundation Movements: A Systematic Review and Future Research Agenda

Chapter

Full-text available

Mar 2023

Mohammad A. A. Zaid

Motivated by the growing demands for global sustainability and climate change disclosure practices, this review article intends to primarily explore the emerging trends of climate change related disclosures in light of the recent initiatives of IFRS Foundation by epitomizing and mapping the perspectives of prior literature. Hence, this study is a literature review in nature. In this vein, 27 research articles published during 2020–2022 in high-quality academic journals are randomly selected for the analysis. The reviewing process was restricted to the academic papers available in the leading databases, namely, Scopus, Web of Science, Chartered Association of Business Schools (hereafter ABS), and Australian Business Deans Council (hereafter ABDC). In this context, to generate a profound knowledge, this research casts the light solely on prior studies that published after a while of proclaiming the consultation paper on sustainability reporting by the IFRS Foundation “In September 2020”. The findings reveal that the overwhelming majority of the analyzed papers used empirical techniques. Furthermore, the results unveil that the most widely keywords were climate change, carbon reporting/disclosure, greenhouse gas disclosure corporate climate change disclosure respectively. For future research directions, the analyzed papers suggest further indirect investigations of the effect of board diversity, professional shareholders, audit committee, green innovation, cost of capital on climate change related disclosures. Accordingly, the study findings provide multidimensional insights for future researchers to bridge the gaps in the current literature.KeywordsAccounting for climate changeClimate change disclosureCarbon disclosureGreenhouse gas disclosureClimate risk disclosureIFRS Foundation

EVALUATING BANKS' FINANCING CHARACTERISTICS AND PROFITABILITY OF QUOTED MANUFACTURING FIRMS IN NIGERIA

Article

Full-text available

Dec 2022

The study examined the effect of bank financing characteristics on the profitability of quoted manufacturing firms in Nigeria from 2020-2021, using panel regression analysis. The results of the study revealed that bank loans and advances have a positive and statistically significant effect on profit after tax as a measure of profitability; bank loans and advances have a positive and statistically significant effect on return on assets as a measure of profitability and bank loans and advances have a positive and statistically significant impact on net worth as a measure of profitability. Based on the finding from the study, the following recommendations were made; government should endeavour to ensure that there are available and sufficient finance allocated to the manufacturing sector in Nigeria with reasonable or affordable lending rates. This will enable the manufacturing sector in Nigeria to operate on its production possibility curve, which is full capacity; banks should be further empowered, so as to be able to grant a long-term loan that would boost the manufacturing sector's performance and interest rate must be allowed to operate through a market mechanism to ensure that interest rate is determined by the demand for loanable fund and the supply of loanable fund and also Stabilization policy should be put in place by the monetary authority to control inflation.

EVALUATING BANKS' FINANCING CHARACTERISTICS AND PROFITABILITY OF QUOTED MANUFACTURING FIRMS IN NIGERIA

Article

Full-text available

Dec 2022

The study examined the effect of bank financing characteristics on the profitability of quoted manufacturing firms in Nigeria from 2020-2021, using panel regression analysis. The results of the study revealed that bank loans and advances have a positive and statistically significant effect on profit after tax as a measure of profitability; bank loans and advances have a positive and statistically significant impact on return on assets as a measure of profitability and bank loans and advances have a positive and statistically significant effect on net worth as a measure of profitability. Based on the finding from the study, the following recommendations were made; government should endeavor to ensure that there are available and sufficient finance allocated to the manufacturing sector in Nigeria with reasonable or affordable lending rates. This will enable the manufacturing sector in Nigeria to operate on its production possibility curve, which is full capacity; banks should be further empowered, so as to be able to grant long-term loans that would boost the manufacturing sector's performance and interest rate must be allowed to operate through a market mechanism to ensure that interest rate is determined by the demand for the loanable fund and the supply of loanable fund. Also, a Stabilization policy should be put in place by the monetary authority to control inflation.

Determinants of Bank Deposits in Ghana: A Cointegration Approcah

Article

Full-text available

Dec 2022

Contents

Factors Influencing the Amount of Mudarabah Savings Deposit in Public Sharia Banks

Article

Full-text available

Nov 2022

Penelitian ini bertujuan untuk mengetahui pengaruh tingkat suku bunga bank umum, nilai tukar rupiah, bagi hasil deposito Bank Umum Syariah dan jumlah Kantor Cabang Pembantu (KCP) terhadap jumlah simpanan deposito mudharabah pada Bank Umum Syariah di Indonesia. Pendekatan dalam penelitian ini adalah kuantitatif asosiatif yang menggunakan metode Analisis Regresi Linier Berganda dengan pengujian sampel yang digunakan berasal dari 12 bank yang berada di Indonesia berdasarkan laporan bulanan Bank Umum Syariah mencakup tahun 2017 hingga 2021. Hasil penelitian menunjukkan bahwa, tingkat suku bunga bank umum tidak berpengaruh secara parsial terhadap jumlah simpanan deposito mudharabah bank umum syariah, nilai tukar rupiah, bagi hasil deposito dan jumlah Kantor Cabang Pembantu (KCP) berpengaruh secara parsial terhadap jumlah simpanan deposito mudharabah Bank Umum Syariah, tingkat suku bunga bank umum, nilai tukar rupiah, bagi hasil deposito Bank Umum Syariah dan jumlah Kantor Cabang Pembantu (KCP) berpengaruh secara simultan terhadap jumlah simpanan deposito mudharabah pada Bank Umum Syariah.

The Transmission Mechanism of Monetary Policy via Bank' Balance Sheet: An Empirical Study of Dual Banking System in Pakistan

Article

Full-text available

Oct 2022

This study empirically analyzes the MPTM through bank' balance sheet in Pakistan for the period of 2008-2018. The data set consists of 22 conventional banks and 18 Islamic banks (5 full-fledged and 13 Islamic windows of conventional banks) of Pakistan. The study employs the robust two-step system-Generalized Method of Moments is applied for estimation and confirms the presence of balance sheet channel in Pakistan. The study also finds that responses of Islamic banking operations to monetary policy shocks are not different from their conventional peers because both banking systems use Karachi Interbank offered rate (KIBOR) as a benchmark for their products. The results also highlight the sensitivity of banking operations (conventional vs Islamic) to monetary policy shocks are quite different, mainly due to the difference in their nature of contracts. This study is equally beneficial for academicians and practitioners to consider the nature of both banking systems in same economy. Our findings indicate that, policy makers need to consider the nature of both banking system (conventional vs Islamic) to maintain deposits and credit supply in an economy. ABSTRAK Kajian ini secara empirikal menganalisis MPTM melalui kunci kira-kira bank di Pakistan untuk tempoh 2008-2018. Set data terdiri daripada 22 bank konvensional dan 18 bank Islam (5 bank penuh dan 13 bank jendela Islamik) Pakistan. Kajian ini menggunakan Kaedah Momen Teritlak-sistem langkah dua untuk membuat anggaran dan mengesahkan kehadiran saluran kunci kira-kira di Pakistan. Kajian itu juga mendapati bahawa tindak balas operasi perbankan Islam terhadap kejutan dasar monetari tidak berbeza dengan rakan konvensional mereka kerana kedua-dua sistem perbankan menggunakan kadar tawaran Karachi Interbank (KIBOR) sebagai penanda aras untuk produk mereka. Hasilnya juga menyerlahkan sensitiviti operasi perbankan (konvensional vs Islam) kepada kejutan dasar monetari agak berbeza, terutamanya disebabkan oleh perbezaan sifat kontrak mereka. Kajian ini juga memberi manfaat kepada ahli akademik dan pengamal perbankan untuk mempertimbangkan sifat kedua-dua sistem perbankan dalam ekonomi yang sama. Penemuan kami menunjukkan bahawa, pembuat dasar perlu mempertimbangkan sifat kedua-dua sistem perbankan (konvensional vs Islam) untuk mengekalkan deposit dan bekalan kredit dalam ekonomi. Kata kunci: Dasar monetari; saluran kunci kira-kira; bank Islam; bank konvensional; mekanisme penghantaran dasar monetari.

Patronage Factors and the Behavior of Customers towards Islamic Banking in Nigeria

Article

Full-text available

Oct 2022

In this study, the selection criterion for Islamic banking in Nigeria was examined. Thus, the study investigates whether variables like; rate of return, Islamic teaching, bank's reputation and service quality account for why customers patronize Islamic bank (Jaiz bank) in Nigeria. The general behavior of customers towards Islamic banking in Nigeria was also investigated. A survey research design was adopted and all the customers of Jaiz bank branch in Herwa Gana Ward, Commercial Area of Gombe Local Government Area constitute the population of the study. A suitable sample of 60 respondents was the study's focus. The respondents were chosen using a convenient sampling strategy. 52 of the 60 administered surveys were deemed to be valid. The data were examined using simple percentages, descriptive statistics, correlation, and regression. It was discovered that in Nigeria, customers' attitudes toward Islamic banking are significantly influenced by the rate of return, Islamic principles, and bank reputation. In order to draw in more clients, the study advises Jaiz Bank to build upon its positive reputation and enhance the quality of its services. They can also promote the religious traditions in their advertisements to attract customers who are motivated to benefit from interest free banking services.

Customer Satisfaction and Awareness of Islamic Banking System in Ampara

Conference Paper

Full-text available

Nov 2018

The idea of Islamic banking is not a new one. The popularity of Islamic banking is growing day by day in various Islamic and non-Islamic countries. The conventional banking industry is a well-established competitor for the Islamic banking industry. Now for this rivalry, Islamic banking industry must consider their customer's approach, satisfaction and awareness level towards it. In this descriptive research study, a sample of Islamic bank account users from different regions of Ampara was studied, to analyze the customer's satisfaction, awareness level towards the Islamic banking industry and to investigate the relationship between the satisfaction, awareness of customers and different demographic variables. A total of 130 customers' data were collected and required statistical analyses were performed using SPSS software. The study results exposed that the trend of the customer in the sense of age, the majority of the customer are in the age of 21 to 40 years and only 30% of the customers were educated in undergraduate and postgraduate levels. And also most of the customers were of the middle-income level. 57% of them have an account in other conventional banks also. The results recommend that overall Islamic banking system customers are mostly satisfied with the Islamic banking services been provided to them and the banking efficiency in their transactions. There is high possible in the victory of the Islamic banking industry if the Islamic banking industry spread out their network with customer demanded product.

Behavioural Aspects of Religiosity in Finance: A Brief Survey on Conventional Versus Islamic Finance

Article

May 2022

Huseyin Ozturk

Religious beliefs are accepted to be one of the main motivations for financial actions. The economic theory fails to provide an adequate foundation to study the link between religiosity and economic behavior. A number of empirical studies discusses the role of religion on the financial behavior of economic agents yet more research needs to be conducted. This study provides a brief review on how religiosity might affect financial behavior by the inclusion of recent studies. In addition to the empirical research that is based on European countries, we discuss the differences in different geographies and finance schemes. We also debate the potential factors that affect differing behavioral aspects with respect to religiosity.

Islamic Banking Products: Home Country Bias and Majority Out-Group Consumption

Article

Oct 2021

This study provides an overview of the incentives for Muslims and non-Muslims to adopt Islamic Banking (IB) products in non-Muslim developing country. Data is collected from a sample of 1,128 Mauritians. Religion is found to have a significant influence on the intention to adopt IB products. Our results support the prediction of the theory of reasoned action as an individual is more likely to adopt IB product if he/she understands the relevant concepts and terminologies. The adoption of IB products for Muslim customers is significantly associated with bank selection criteria. Further, we provide evidence of a home country bias related to a set of financial products, as well as tactics successful in overcoming the costs of the liability of foreignness in incentivizing cultural “out-groups” to adopt IB products. Our study contributes to the literature on the motivation of individuals to adopt IB products, which is highly relevant for Islamic banks worldwide that seek to offer similar products and attract new customers. We provide implications for bank marketing managers facing the challenge of increasing adoption of new financial services and products in markets where customers may not be aware of the associated benefits due to cultural, religious, or ethnic barriers.

Benchmarking the Intermediation Costs of Islamic and Conventional Banks: Evidence from Indonesia

Article

Sep 2021

The number of studies examining the intermediation costs of Islamic banking remains limited. This paper aims to benchmark the intermediation costs of Islamic and conventional banks as measured by net profit or net interest margin. The question to be answered is whether the level of net margin is higher or lower in Islamic than in conventional banking. This paper relies on the system generalized method of moments (GMM) panel regression, in which net margin is treated as a function of “pure spread” determinants, bank-specific variables not formally seen as “pure spread” determinants, and macroeconomic conditions. The sample includes unbalanced panel data from 12 Islamic and 97 conventional banks in Indonesia over 2004-2018. The results indicate no strong evidence that the level of net margin in Islamic banking differs from that in conventional banking. The difference between net margins in the two banking systems is at best not robust. It is subject to the inclusion of different control variables, the composition of the sample, and, most importantly, outliers. Both anecdotal beliefs saying that Islamic banking is more costly and an opposing claim that Islamic banking brings about a promise for lower intermediation costs should not be taken for granted.

The Factors Affecting Mudharabah Deposits of Sharia Banking in Indonesia

Article

Full-text available

Aug 2016

Iim Hilman

Mudharabah deposit is one of main fund resource of sharia bank, teherefore the growth must be maintained. This research is aimed to find whether there are influences of profit-sharing rate of mudharabah saving, interest rate of saving in conventional bank, growth rate of Jakarta Islamic Index (JII), and Gross Domestic Product (GDP) to the amount of mudharabah saving in sharia banks. The sharia banks which are used in this research are all of sharia commercial bank in Indonesia.The method of this research is Ordinary Least Square (OLS) with quarterly panel data from 2006 to 2015 of the twelve sharia banks which are observed. The approach model which is used in this research is Fixed Effect Model. The result of this research showed that profit-sharing rate of mudharabah saving, interest rate of saving, growth rate of Jakarta Islamic Index (JII), and Gross Domestic Product (GDP) have significant influences to the amount of mudharabah saving in sharia banks. Profit-sharing rate of mudharabah saving, growth rate of Jakarta Islamic Index (JII), and Gross Domestic Product (GDP) have positive influences to the amount of mudharabah saving, Meanwhile, interest rate of saving in conventional bank has a negative influence to the amount of mudharabah saving.

Financial Performance Comparison of Islamic and Traditional Banks in Emerging Markets

Article

May 2020

Purpose-This study aims to investigate the performance differences of Islamic and traditional banks in Egypt by using financial ratios. Design/methodology/approach-This study analyzed 2 Islamic and 9 traditional banks for the periods of 2002-2010. Descriptive statistics and paired sample T-test were performed. Secondary data was obtained from the annual financial reports of the banks for the period under the study. Findings-The performance of the Egyptian traditional banks shows supremacy and dominance over the performance of the Egyptian Interest free banks. The capital adequacy ratios, profitability level, quality of management, and liquidity proved to be significantly better for traditional banks. While the results of the study concerning the quality of assets showed no significant difference between Islamic and traditional banks.

Dependency of Islamic bank rates on conventional rates in a dual banking system: A trade-off between religious and economic fundamentals

Article

Sep 2021
Int Rev Econ Finance

The dependence of Islamic bank rates on the conventional bank rate violates the religiosity principle and the fundamentals of an efficient market due to the possibility of arbitrage profit from the rate differences. This study tests such dependency in a dual banking system by considering monthly data from January 2009 to April 2018 on Malaysia banks using several ARDL tests, supplemented by robustness tests using a 12-month correlation of the rolling standard deviation and causality models based on the Toda-Yamamoto approach to investigate the short- and long-run dependency of rates. The study finds that Malaysia's Islamic bank deposit and financing rates are influenced by both the conventional and Bank Negara Malaysia's policy rates. Results imply that Islamic banks do serve profit-driven customers. We suggest that Islamic banks are forced to benchmark their rates to conventional rates because of the trade-off between religious and economic fundamentals by profit-driven customers. The study demonstrates that the question of Islamic legitimacy of Islamic banks needs to be addressed considering the correct profiling of the customer-base and the regulatory environment in which Islamic banks operate in. We discuss implications for Islamic rate-setting behavior in the presence of monetary shocks in a dual banking system.

Selection of Islamic banking in a multicultural context: the role of gender and religion

Article

Jun 2021

Purpose As the popularity of Islamic banking and financial instruments continues to rise globally, a recurring empirical question is what specifically makes consumers choose Islamic banking. This paper aims to investigate the determinants of bank type selection, especially in culturally diverse settings where the Islamic banking sector is well-established. It further examines whether consumers’ gender/religion influences their choices. One intuitive prediction is that Muslim consumers opt for Islamic banking products as “ethical” because of conviction-related reasons. However, the reality is not necessarily straightforward. Design/methodology/approach This paper uses structural equation modeling to examine data collected from a survey questionnaire of 790 respondents in an emerging market setting. Further analysis is made based on gender and religion to remove related bias. Findings Results suggest that overall consumer awareness significantly affects the selection of Islamic banking products. The positive effect of awareness is more significant for Muslim consumers relative to non-Muslims. Interestingly, social stimuli and bank attributes have an insignificant effect on the banking choices of both Muslims and non-Muslims. Practical implications Results suggest that Islamic banks’ marketing managers should adopt differentiated strategies for men and women, focusing on the core benefits of the service or personal interactions with consumers, respectively, along with a focus on different aspects of personal service for each gender. Awareness should be enhanced by adopting informative and effective marketing strategies to attract and retain consumers in the competitive bank environment. Islamic banks (IB) should pay attention to the religious effect without considering it as the sole variable motivating potential customers. They should design segmented and customized marketing strategies based on gender-religion market segmentation to suit different groups’ needs. Originality/value The findings fill a gap in the literature and provide Islamic bankers with insights to help design and articulate their business strategies to appeal to consumers in a multicultural context. Examining an integral part of gender and religion mitigates biased estimates due to the omission of variables. The study contributes to the existing literature on customer preferences for IB with a relatively large, new data set.

Monti di Pietà of 1500 and the Islamic banks as models of common good

Article

Dec 2020

Introduction: The study compares two banking systems that have marked and mark the current system in Europe and the Middle East. The Monti di Pietà of 1500 and the Islamic banks which have developed several key features of the past, present the pillars of the Neo-Aristotelian concept of common good. Aim of the work: The study aims to identify the historical, cultural, and accounting factors, similarities, and ethical principles of the two models to identify key elements supporting the common good concept. Methodological approach: This study adopts a historiographical approach that delves into the relationship between narrative, interpretive, and explanatory history, in which it argues that the historical narrative involves elements of interpretation and explanation. Furthermore, a considerable importance is given to the banking environment's political, religious, and regulatory aspects. Main findings: The analysis conducted traces ethical, cultural, and religious components , highlighting many aspects that confirm the starting theory and enrich its conception through financial models that are apparently distant from each other. The study highlights how reciprocity, solidarity, and support for the social fabric of growth have joint agreements and aspects characterizing the two models.

A Comparative Study of Canara Bank and Karnataka Bank- A Case Study

Article

Full-text available

Sep 2022

Purpose: The banking industry is crucial to economic growth. It's one of India's fastest-growing sectors, with a massive network of bank branches offering financial services. The study is being undertaken to find out the profitability of banks the deposits and advances, interest received and expended by Canara Bank (Public sector) and Karnataka Bank (Private sector). The study was undertaken by considering the deposits and advances of the two banks over 5 years. Methodology: The foundation of qualitative research is secondary data. Annual reports, manuals, previous bank records, and balance sheets are used to collect data. Focus group contacts with the manager and the staff are conducted to obtain in-depth data. Findings: The study indicated that advances and deposits had a favorable and considerable influence on the net profits earned by banks. Originality: The study highlights the effects of deposits and advances on the profitability of the banks. Paper type: Case study Keywords: Deposits, Advances, Canara Bank, Karnataka Bank, Public Sector, Private Sector, Profitability, SWOC analysis (PDF) A Comparative Study of Canara Bank and Karnataka Bank- A Case Study. Available from: https://www.researchgate.net/publication/363866091_A_Comparative_Study_of_Canara_Bank_and_Karnataka_Bank-_A_Case_Study [accessed Jul 12 2024].

ANALISIS UKURAN DAN PERTUMBUHAN UMKM BERBASIS SYARIAH DI KABUPATEN BONDOWOSO PERIODE 2019 - 2023

Article

Full-text available

Feb 2024

Tujuan dari penelitian ini adalah untuk menganalisa peranan sektor usaha kecil menengah tidak berbadan hukum dalam penyerapan tenaga kerja di daerah Bondowoso. Penelitian ini juga menganalisa faktor-faktor lain yang mempengaruhi penyerapan tenaga kerja di sektor usaha kecil menengah tidak berbadan hukum. Objek penelitian adalah propinsi-propinsi yang ada di daerah Bondowoso dengan periode tahun 2019-2023. Hasil penelitian memperlihatkan bahwa sektor usaha kecil menengah tidak berbadan hukum mempunyai pengaruh yang positif dan signifikan terhadap penyerapan tenaga kerja. Sedangkan faktor lain yaitu produk domestik regional bruto per kapita dan upah minimum regional, masing-masing mempunyai pengaruh negatif dan positif yang signifikan terhadap penyerapan tenaga kerja di sektor usaha kecil menengah tidak berbadan hukum di daerah Bondowoso dengan periode tahun 2019-2023.

FAKTOR-FAKTOR INTERNAL DAN EKSTERNAL YANG MEMPENGARUHI PERTUMBUHAN ASET PERBANKAN SYARIAH DI INDONESIA

Article

Jan 2014

Abstrak Target pertumbuhan pangsa pasar bank syariah yang ditetapkan oleh Bank Indonesia sebesar 5 persen dapat diupayakan tercapai, salah satunya dengan cara meningkatkan jumlah aset yang ada di bank syariah. Peningkatan aset perbankan syariah dipengaruhi oleh banyak faktor yang secara umum dapat diklasifikasikan menjadi faktor internal dan faktor eksternal. Penelitian ini bertujuan untuk mengetahui faktor-faktor internal dan eksternal yang mempengaruhi pertumbuhan aset perbankan syariah di Indonesia. Dalam hal ini faktor-faktor internal yang digunakan adalah jumlah kantor bank syariah, rasio NPF, rasio FDR, biaya promosi, dan jumlah dana pihak ke-tiga (DPK) yang ada di bank syariah. Sedangkan faktor-faktor eksternal yang dipilih adalah office chaneling dan jumlah uang beredar (M2). Dimana data-data yang digunakan adalah data statistik bank umum syariah (BUS) dan unit usaha syariah (UUS) di Indonesia pada periode September 2008 sampai dengan September 2010. Untuk dapat mengambil kesimpulan, maka digunakan analisis dengan metode regresi linier berganda. Dari tujuh variabel yang diteliti, ternyata hanya lima variabel yang memenuhi persyaratan BLUE, yaitu jumlah kantor bank syariah, rasio NPF, rasio FDR, biaya promosi, dan office chaneling dan berdasarkan hasil penelitian diperoleh faktor yang mempengaruhi pertumbuhan aset perbankan syariah adalah junlah kantor, rasio FDR, dan biaya promosi. Kata kunci: NPF, FDR, DPK, office chaneling, M2

TÜRKİYE’DE KATILIM BANKALARI FONLARI İLE MEVDUAT FAİZLERİ İLİŞKİSİ; EŞBÜTÜNLEŞME, DOLS VE FMOLS ANALİZİ

Article

Feb 2024

İsmail Cem Özkurt

Finansal sistem başta ekonomik büyüme olmak üzere ülkelerin makroekonomik hedeflerini gerçekleştirmede büyük rol oynamaktadırlar. Sistemde en önemli rolü ise bankalar oynamaktadır. İslam dininde faizin kesin bir dille yasaklanmış olması Müslüman ülkelerde bu sistemin gelişememesine neden olmuştur. Atıl fonların artması ve ekonomilerin büyüme ihtiyaçları üzerine İslam dini hükümlerine uygun bir bankacılık sistemi arayışları neticesinde katılım bankacılığı ortaya çıkmıştır. Bu çalışmanın amacı, Türkiye’de 2006:01-2023:06 döneminde aylık verilerle katılım bankalarının topladıkları fonlarla ticari bankaların bir, üç, altı ve bir yıl vadeli mevduat faiz oranları arasındaki ilişkiyi tespit etmektir. Değişkenler arasında eşbütünleşme ilişkisi tespit edildikten sonra ilişkinin yönü ve şiddetini belirlemek için DOLS ve FMOLS testleri yapılmıştır. Sonuçta bir ay ve altı ay vadeli mevduat faiz oranları katılım bankalarının topladıkları fonları negatif etkilerken üç ay ve bir yıl vadeli mevduat faiz oranları toplanan fonları pozitif etkilemektedir.

A Piece of Education on Comparative Performance Study of Islamic Banking system and Commercial Banking system in Pakistan

Article

Apr 2021

Et. al. Dr. Khurram Sultan

Purpose of the study: Islamic banking has been explained in numeral ways. This study is shown to find out the difference among the two parts of banking, the first one is Islamic banking and the second one is conventional banking system of Pakistan with respect to liquidity, efficiency, and profitability. The secondary data from banks of each banking subdivision is taken for valuation. Proportion analysis is used to define the characteristics of study respondents and regression analysis is used to study the difference in term of significant factors that affect client trust of Islamic banks and commercial banks. Methodology: The secondary data from banks of each banking area is taken for calculation. Ratio analysis is used to conclude the characteristics of study respondents and regression analysis is applied to examine the difference in term of significant factors that influence customer trust of Islamic banks and commercial banks. Five Islamic banks and five commercial banks has been taken as sample under population of all the banks Main Findings: The results of the study show that there is important difference among the both kinds of banking for the variables under study. Furthermore, influence of return on asset is more on client trust for the study period (2015– 2019) for the Islamic bank as compared to the conventional banking. The study also inspects the important factors that are significant for development of Islamic banking. Application of this study: This study contributes toward the financial area for policymakers in order to build the best policies of the banking system. New banks can get advantage form this study in order to achieve their goals this thing will ultimately lead toward the success.

The Impact of Inflation Rate and Interest Rate on Islamic and Conventional Banking in Afghanistan

Article

Nov 2023

Tareq Nikzad

Since the first bank was established in 1933, Afghanistan's banking sector has seen a number of variations but hasn't been able to grow to its full potential because of the civil war. The implementation of dual banks in Afghanistan is investigated in this study in relation to the effects of inflation and interest rates. This research took data from World Bank Data (WBD) over a period of nineteen years. For the banking sector, inflation, which is the general rise in prices of goods and services over time, presents considerable difficulties. The objectives of this research are to analyze the effect of inflation and interest rates on conventional and Islamic banks in Afghanistan, identify potential differences between these two banking models, and provide insights for policymakers and practitioners. A mixed-methods approach is used in the research to analyze quantitative data and qualitatively examine the unique difficulties that banks in Afghanistan's economic atmosphere encounter. The findings contribute to the understanding of the relationship between interest rate, inflation rate, and the performance of both banking systems in Afghanistan. The paper concludes with recommendations for policymakers and banking institutions to enhance the stability and growth of the banking sector in Afghanistan. Interest is described as "a prefixed rate for use or borrowing of money" from an Islamic perspective. This "prefixed rate," known in Islamic economics as "riba," has been described as "something undesirable." Furthermore, by using the time series regression data technique on the annual data from 2003 to 2021, this research examines the effect of CPI inflation rate and interest rate of Banking in Afghanistan.

Bankaların Tasarruf Mevduatları ile Tasarruf Katılım Fonlarının Seçili Makroekonomik ve Finansal Göstergeler ile İlişkisi Üzerine Ekonometrik Bir Analiz ////// An Econometric Analysis on the Relationship of Banks' Savings Deposits and Savings Participation Funds with Selected Macroeconomic and Financial Indicators

Article

Full-text available

Sep 2023

Onur Şeyranlıoğlu

Bu araştırmada, Türkiye’de bankaların tasarruf mevduatları ve tasarruf katılım fonları hesaplarının seçili makroekonomik ve finansal faktörler ile ilişkisi incelenmiştir. Johansen eşbütünleşme testi bulgularına göre her iki modelde seriler arasında uzun dönemli ilişki tespit edilmiştir. Uzun dönem VECM bulgularında, döviz kuru, enflasyon ve altın fiyatlarının bağımlı değişkenler üzerinde pozitif ve istatistiki açıdan anlamlı etkilerinin olduğu tespit edilmiştir. Döviz kuru, enflasyon ve altın fiyatlarının, tasarruf katılım fonlarını daha fazla etkilediği görülmüştür. BİST-100 endeksi ile bağımlı değişkenler arasında istatistiki açıdan anlamsız ve negatif bir ilişki tespit edilmiştir. Faiz oranı ile sadece tasarruf mevduatları arasında istatistiksel açıdan anlamlı ve pozitif bir ilişki söz konusudur. Son olarak seriler arasındaki nedensellik ilişkileri Toda-Yamamoto testi ile sınanmıştır.

Factors that Influence Profit Sharing Investment Account Holders (PSIAHs) to Patronise Islamic Banks in Nigeria: An Empirical Study

Chapter

Mar 2023

Islamic banks (IBs) known as non-interest banks (NIBs) in Nigeria obtain majority of their deposits from profit-sharing investment accounts (PSIAs) (also known as mudarabah accounts). Jaiz bank was the first Islamic bank licensed in Nigeria and commenced operation in 2012, while Sterling bank was established as an Islamic banking window in 2013. At the initial years of their operations, the two banks attract over 60% of their deposits from PSIAs. However, in later years, a gradual but consistent decline in the contribution of PSIAs to the total deposits of the banks was observed. This is despite the share of profit that the banks paid their PSIAs which was higher than the average interest paid by conventional banks for savings account deposits of similar tenor during the period under review. Considering the importance of mudarabah account to Islamic banks, any decrease in its contribution to their total deposit is a source of concern, because it might indicate a gradual loss of confidence in the Islamic banks and a preference for a guaranteed deposit (that is likened to conventional banks’ deposits). Therefore, the aim of this study is to examine the behavioural intention of PSIAHs to patronise IBs in Nigeria. With the objective of understanding the factors that caused the reduction of PSIAs in the total deposits of the banks for the period 2012–2020 using the Theory of Planned Behavior (TPB). TPB was especially chosen because of its flexibility and robustness in predicting the intention of people to perform a particular behaviour. Data was collected from 420 respondents and was analyzed using the Analysis of Moment Structures-Structural Equation Modelling (AMOS-SEM). 10 hypotheses were tested, and results obtained showed that 5 of the constructs including attitude, perceived behavioural control, religiosity, service quality, and deposit insurance have positive and significant influence on the intention of PSIAHs to patronize Islamic banks in Nigeria. The study makes theoretical and practical contributions and contributed to the literature on the study of deposit mobilization practices by Islamic banks which have been reported to be scarce. Findings of this study is important to Islamic banks in Nigeria because it revealed factors that are important in attracting and retaining their customers especially PSIAHs.KeywordsNigeriaPSIAHsMudarabah accountsIslamic banksIsah Ya’u

The Profit Rate-Interest Rate Nexus Evidence from Machine Learning Algorithms

Article

Full-text available

Apr 2022

The main purpose of this study is to examine potential predictors of profit rates and dee-posit rates and to examine whether these rates are affected by identical factors. This paper empirically addresses tree-based machine learning algorithms (e.g., boosting, bagging, random forest). The empirical findings of the study demonstrate participation banks' profit rates to be more influenced by industrial production due to these banks being in contact more with real economic activity. As expected , however, domestic and global interest rates appear to have great significance in how deposit banks set their rates. This study contributes to the literature in two ways. First, it determines the potential predictors of profit rates and deposit rates in a data-rich environment. Second, the study uses random forest, bagging, and boosting algorithms as methodological tools and benefits from the apparent advantages these algorithms have empirically.

A Comparative Study of Canara Bank and Karnataka Bank- A Case Study

Article

Full-text available

Sep 2022

Purpose: The banking industry is crucial to economic growth. It's one of India's fastest-growing sectors, with a massive network of bank branches offering financial services. The study is being undertaken to find out the profitability of banks with respect to the deposits and advances, interest received and expended by Canara Bank (Public sector) and Karnataka Bank (Private sector). The study was undertaken by considering the deposits and advances of the two banks over 5 years. Methodology: The foundation of qualitative research is secondary data. Annual reports, manuals, previous bank records, and balance sheets are used to collect data. Focus group contacts with the manager and the staff are conducted to obtain in-depth data. Findings: The study indicated that advances and deposits had a favorable and considerable influence on the net profits earned by banks. Originality: The study highlights the effects of deposits and advances on the profitability of the banks. Paper type: Case study

Customer Satisfaction Standards According to Islamic and Conventional Banking System in Pakistan

Article

Jun 2022

This study analyzed consumer loyalty with Islamic banks and ordinary banks in Pakistan. The historical backdrop of regular banks in Pakistan is superior to that of Islamic banks. The improvement of an Islamic financial framework in Pakistan is at an untimely stage. In Pakistan, not many banks offer clean Islamic financial administrations to their clients. This concentrate likewise analyzes consumer loyalty with the administrations of traditional banks as well as Islamic banks. Our objective region is the Pakistani financial area, and the information comes from interviews with five Islamic banks and five ordinary banks in Pakistan. The aftereffect of this exploration showed that the clients of the two banks were from Islamic banks or traditional banks were happy with the offices given by the banks, notwithstanding, the clients of regular banks were happier with Islamic banks. Hypothetically, current investigations supplement the writing on the above viewpoints and connection them to consumer loyalty. Simultaneously, it causes to notice the factors that are fundamental for the advancement of Pakistan's Islamic financial framework. The discoveries likewise give important data and direction to Islamic banks to plan creative item advancement procedures and publicizing approaches to hold existing clients and draw in possible clients. This study extends the extent of the accessible writing on Islamic banking; However, it doesn't address the situation of the ordinary financial area.

Faktor-Faktor yang Mempengaruhi Penghimpunan Dana Pihak Ketiga Perbankan Syariah di Indonesia

Article

Full-text available

Dec 2015

This study aims to determine the development of third-party funds of Islamic Banking in Indonesia. This study uses time series data Q1 2008 to Q4 2012. The analysis tool used is multiple regression. Based on the survey results revealed that conventional banking interest rate (r), the equivalent rate (ER), Economic Growth (PE) and Growth Outlet (PO) are jointly very significant effect on Islamic Banking Deposits While partially known that conventional banking interest rate (r) significantly affects deposits, equivalent rate (ER) was not statistically significant effect, Economic Growth (PE) no statistically significant effect and Growth Outlet (PO) statistically significant effect on Deposits Islamic Banking. Keywords:interest rate, outlet, equivalent rate Abstrak Penelitian ini bertujuan untuk mengetahui perkembangan penghimpunan Dana Pihak Ketiga (DPK) Perbankan Syariah di Indonesia. Penelitian ini menggunakan data time series triwulan 1 tahun 2008 sampai dengan triwulan 4 tahun 2012. Alat analisis yang digunakan adalah regresi berganda. Berdasarkan hasil analisis diketahui bahwa Suku Bunga perbankan konvensional (r), Equivalen rate (ER), Pertumbuhan Ekonomi (PE) dan Pertumbuhan Outlet (PO)secara bersama-sama berpengaruh sangat nyata terhadap DPK Perbankan Syariah. Sementara secara parsial diketahui bahwa Suku bunga Perbankan konvensional (r) berpengaruh signifikan terhadap DPK, Equivalen rate (ER) tidak berpengaruh signifikan secara statistik, Pertumbuhan Ekonomi (PE) tidak berpengaruh signifikan secara statistik dan Pertumbuhan Outlet (PO) berpengaruh signifikan secara statistik terhadap DPK Perbankan Syariah. Kata Kunci: tingkat bunga, outlet, equivalent rate

Factors Affecting Profit Distribution Management of Islamic Banks: Moderating Role of Corporate Governance

Article

Full-text available

Oct 2021

Investigation on the Effects of Customer Knowledge, Political Support, and Innovation on the Growth of Islamic Banking System: a Case Study of Pakistan

Article

Full-text available

Feb 2022

This study aims to investigate the impact of customer knowledge, political support, and innovative advancement on the development of Islamic bank. There is a strong microeconomics ground of Islamic financing for the economy-wide conduct of good monetary issues, and issues including the procedure structure. Islamic bank clients limit the dangers related to premium-based obligation financing, and simple credit, which tormented regular banks amid the sub-prime home loan emergency. In short, when there will be sufficient knowledge and information about the Islamic banking services and products, then it will help to develop the Islamic banking system, and similar is the case for advanced innovations. Meanwhile, strong political support can also play an influential role in the development of the Islamic banking system. This study collects the data through self-administered survey from managers of Islamic banks located in the Lahore region. The results of regression analysis are obtained through SPSS. The findings revealed that customer knowledge, innovations, and political support positively and significantly influence the growth of Islamic banks in Pakistan. In other words, good knowledge, innovations, and political support can result in more Islamic banking system development. Conclusively, general monetary development of Islamic banking in Muslim nations will drive the development of Islamic money-related administrations, prompting further in Sharia-consistent system.

Can money be compared to energy? Empirical analysis of making money with the E = mc2 logic

Article

Full-text available

Jan 2022

In this study, the E = mc2 principle that energy can be derived from mass and energy as itself was adapted for money. In the study, it was meant to provide a natural dimension to not using money other than the intent of exchange and the necessity of earning money by producing. To this end, the effect of foreign direct investments that are representing production and portfolio investments' effects on economic growth as representing monetary activities. The findings showed that both in the long and short term, there is a positive and significant relationship between FDI and economic growth. No such relationship has been found for portfolio investments. This result coincides with the E = mc2 relationship.

Contribution of the Banking Sector for Economic Growth, Case of Ethiopian Banks

Preprint

Full-text available

Sep 2021

Financial institutions, especially the banking sector plays a crucial role in models of economic growth. It is an essential component of investments; bank Profit/Loss, banks deposits, banks advances and Interest Earning have considerable effect on economic activity and long-term economic growth. The view that, strong financial sector performance has the key to economic growth was reflected in the development strategies and plans in many countries. In Ethiopia, the development of the financial sector is limited, the contribution to GDP is also very low, and most of the banks attention to is on similar services and commercial activities in the domestic banking areas rather than diversified and international banking services. After selection of the study variables the researchers were described the economic growth function of the nation using the GDP Model to show the contribution of deposits, investments, advances, profitability and interest earning on GDP. This study is important to the practitioners, policy makers, and potential researchers by providing recommendable solutions those mitigate the obstacles in banking sector and providing conducive financial and economic theories and models important for the banking institutions and other concerned parties. The general objective of this study is to evaluate the contribution of the banking sector for the growth of GDP of the nation, more specifically it evaluate or measure the contribution of deposits, investments, advances, profitability, and interest earning on GDP of the nation. The appropriate research design adopted for this study was descriptive. From the total of 19 private and public banks in Ethiopia 5 banks were purposely selected (1 public and 4 private) for this study. Secondary sources of data were used for the analysis. All secondary data were collected from the different official publications of respected banks, annual reports and National bank of Ethiopia for five years (2009-2013 GC). The collected data were analyzed with the use of the SPSS (statistical package for the social sciences) program 20v. The percentage, mean, standard deviation, coefficient of variation, correlation and multiple regressions were utilized. The finding shows that Deposit, Investment, Advances, profitability, and Interest earned by Banks have significant effect on the GDP growth of the Nation. The percentage share to GDP in the sector was increased from time to time with an average of 22%, 11%, 18%, 0.86%, and 1.2% respectively.

Predictive Factors of Withdrawal Behavior among Profit-Sharing Investment Depositors in Morocco: A Qualitative Study from the Perspective of Push-Pull-Mooring Framework

Article

Full-text available

Jul 2021

The main purpose of this study is to examine the determinants of deposit withdrawal behavior amongst profit-sharing deposit account holders. Based on the Push-Pull-Mooring theory, a qualitative study was conducted, with fifteen personal interviews undertaken with profit-sharing investment depositors selected from three participatory banks using a purposive sampling technique. Assessment of the predictive factors determining deposit withdrawal behavior resulted in three categories. The push factors were found to be, in order of decreasing frequency: (1) Sharia non-compliance risk, (2) lower rate of return, (3) deposit guarantee scheme and (4) customer relationship quality failure. The push factors were labeled as (a) conventional term deposit attractiveness, (b) conventional banks history and (c) number of branches. The mooring factors were found to be: (i) religiosity, (ii) switching costs, (iii) third party influence and (iv) involuntary switching factors. This study has limitations that should be considered for future research. First and foremost, all interviewees were selected by the banks’ managers. Moreover, they were identified as individual depositors; thus, they displayed opinions, which may differ from those of corporate depositors. Despite the discussed limitations, the findings generated from this study have important implications for researchers, financial marketing managers as well as the policy makers and regulators. In terms of contribution to the body of knowledge, the study aimed to investigate the predictive factors of deposit withdrawal behavior in another context, that of Morocco, which has not yet been explored in the literature. In addition, the findings of this study are critical to financial marketing managers for strategic marketing programs as it stresses the importance of satisfaction dimensions within a dual banking system, as is the case in Morocco. Furthermore, this study provides great indications to the policy makers and regulators on the perception of the Moroccan investment account depositors, in order to develop policies that could improve the participatory banking system in Morocco.

Legal and compliance reform for Islamic financial benchmarking

Chapter

Jun 2021

Saving Out of Different Types of Income

Article

Full-text available

Feb 1971

Banking behavior of Islamic bank customers: Perspectives and implications

Article

Full-text available

Dec 1998
Int J Bank Market

Describes a study designed to investigate the banking behavior of Islamic bank customers in the state of Bahrain. The study sample comprised 300 customers. A comprehensive profile analysis and a series of chi-square tests were conducted to reveal key characteristics and patterns: the majority of Islamic bank customers are well educated; approximately 80 per cent are between 25-50 years of age; more than 50 per cent of the surveyed customers have maintained their current banking relationship with Islamic banks for more than six years; customers’ awareness and usage rates are quite high for savings accounts, current accounts, investment accounts and automated teller machines; customers were found to be most satisfied with the products/services they use most, with the investment accounts receiving the highest satisfaction score; Islamic bank employees received the highest satisfaction score among the elements of the service delivery system; the two most important bank selection criteria were adherence to the Islamic principles, followed by the rate of return.

General Theory of Employment, Interest and Money

Book

Jan 1965

John Maynard Keynes

This book was originally published by Macmillan in 1936. It was voted the top Academic Book that Shaped Modern Britain by Academic Book Week (UK) in 2017, and in 2011 was placed on Time Magazine's top 100 non-fiction books written in English since 1923. Reissued with a fresh Introduction by the Nobel-prize winner Paul Krugman and a new Afterword by Keynes’ biographer Robert Skidelsky, this important work is made available to a new generation. The General Theory of Employment, Interest and Money transformed economics and changed the face of modern macroeconomics. Keynes’ argument is based on the idea that the level of employment is not determined by the price of labour, but by the spending of money. It gave way to an entirely new approach where employment, inflation and the market economy are concerned. Highly provocative at its time of publication, this book and Keynes’ theories continue to remain the subject of much support and praise, criticism and debate. Economists at any stage in their career will enjoy revisiting this treatise and observing the relevance of Keynes’ work in today’s contemporary climate.

Some Evidence on the Interest Elasticity of Consumption

Article

Sep 1967

Colin Wright

Bank Patronage Factors of Muslim and Non-Muslim Customers

Article

Feb 1994
Int J Bank Market

A fiercer level of competition is becoming the most influential factor in the structure and activities of the banking system around the globe. Banks are competing not only with themselves, but also with other financial institutions within the financial industry. In a plural society such as in Malaysia, the competition is becoming fiercer with the existence of the Islamic bank, which was established specifically to cater for the needs of the Muslim population in the country. To attract more customers, both conventional and Islamic banks should have information on factors used by customers in selecting their banks. Investigates how Muslims and non-Muslims select their banks and what services they use frequently. Results show that there are many similarities between Muslims and non-Muslims in their selection of banks and utilization of services.

Attitudes, Behaviour, and Patronage Factors of Bank Customers towards Islamic Banks

Article

Dec 1989
Int J Bank Market

The attitudes of bank customers towards Islamic banks are discussed, together with the perceived unique characteristics of Islamic banks by their customers, and the importance of selected patronage factors in choosing conventional and Islamic banks. It is concluded that in considering motives responsible for selecting Islamic banks as depository institutions, religious motives did not stand out as being the only significant ones; bank customers are profit motivated; the evidence generated in the study did not find an important consideration of the new branches' role in increasing the utilisation of services provided by Islamic banks; peer group influence plays an important role in selecting Islamic banks as depository institutions; and there is a high degree of awareness on the part of bank customers of the advantage of the profit-loss-sharing modes of investment and of the economic and social development role of the Islamic banking system.

Islamic Banking: A Study in Singapore

Article

Nov 1997
Int J Bank Market

Establishes that, in Singapore, which has a minority of Muslims in its population, both Muslims and non-Muslims are generally unaware of the culture of Islamic banking. Also the two separate groups have different attitudes towards the Islamic banking movement, with the degree of difference depending on the nature of the respective matter put to them. For example, when asked what they would do if an Islamic bank did not make sufficient profits to make a distribution in any one year, 62.1 per cent of Muslims said they would keep their deposits within the Islamic banking movement, while 66.5 per cent of non-Muslims said they would withdraw their deposits. In relation to bank selection criteria, there was general accord as between Muslims and non-Muslims on the rating of the various criteria. Five significant differences were noted, the most relating to “being paid higher interest on savings”. The desire to be paid higher interest was far stronger with non-Muslims.

Differences between the financial characteristics of interest-free banks and conventional banks

Article

Apr 1997
Eur Bus Rev

M.M. Metwally

Uses logit, probit and discriminant analysis to test for structural differences between the financial characteristics of interest-free banks and conventional banks. The analysis extends to various financial dimensions which evaluate performance, namely: liquidity, leverage, credit risk, profitability and efficiency. Covers 15 interest-free banks and 15 conventional banks. The statistical evidence suggests that the two groups of banks may be differentiated in terms of liquidity, leverage and credit risk, but not in terms of profitability and efficiency.

Demographic Effects and the Multiperiod Consumption Function

Article

Feb 1972

Dale M Heien

The Monetarist Controversy or, Should We Forsake Stabilization Policies?

Article

Feb 1977

Franco Modigliani

In recent years and especially since the onset of the current depression, the economics profession and the lay public have heard a great deal about the sharp conflict between “monetarists and Keynesians” or between “monetarists and fiscalists.” The difference between the two “schools” is generally held to center on whether the money supply or fiscal variables are the major determinants of aggregate economic activity, and hence the most appropriate tool of stabilization policies.

A Note on Inflation and the Saving Rate

Article

Jan 1972

This paper contributes empirically to our understanding of informed traders. It analyzes traders' characteristics in a foreign exchange electronic limit order market via anonymous trader identities. We use six indicators of informed trading in a cross-sectional multivariate approach to identify traders with high price impact. More information is conveyed by those traders' trades which--simultaneously--use medium-sized orders (practice stealth trading), have large trading volume, are located in a financial center, trade early in the trading session, at times of wide spreads and when the order book is thin.

Towards a Theory of Saving Behavior.

Article

Feb 1975

The Allocation of Transitory Income Among Consumer Assets

Article

Feb 1972

Michael Darby

Distribution Effects and The Aggregate Consumption Function

Jun 1975
447-475

Quarterly Bank Negara Malaysia
Kuala Bulletins
Lumpur

Bank Negara Malaysia, Quarterly Bulletins, Kuala Lumpur, various issues Blinder, A.S. (1975), 'Distribution Effects and The Aggregate Consumption Function,' Journal of Political Economy, June, pp. 447-75.

Margin Analysis for Consumer Deposit Interest Rate Policy

Jan 1982
179-184

Robert O Edmister

Edmister, Robert. O. (1982), "Margin Analysis for Consumer Deposit Interest Rate Policy." Journal of Bank Research, Autumn 1982, pp. 179-84.

The Effects of Rates of Profit on Islamic Bank's Deposits: A Note

Jan 1995
18-28

S Haron
B Shanmugam

Haron, S., and Shanmugam, B. (1995), 'The Effects of Rates of Profit on Islamic Bank's Deposits: A Note.' Journal of Islamic Banking and Finance, Vol 12, No 2, pp. 18-28.

Profit-Sharing: Questions that Need to be Answered

Feb 1997
10-12

S Haron

Haron, S. (1997), 'Profit-Sharing: Questions that Need to be Answered.' New Horizon, February, pp. 10-12.

Commercial Bank Management

Jan 1991

Peter Rose

Rose, Peter. S (1991), Commercial Bank Management, Richard D. Irwin Inc., United State of America.

The effects of conventional interest rates and rate of profit on funds deposited with Islamic banking system in Malaysia

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