Deposit behaviour in Indonesia Islamic banking :
do crisis and fatwa matter?
In: Indonesia Islamic Banking Research Forum 2011, 16-17 December, 2011, Padjajaran University, Bandung.
Abduh, Muhamad and Sukmana, Raditya (2011)
Abstract -This
paper attempts to examine factors that influence deposit behaviour of
bank depositors in Indonesia Islamic banking. Several explanatory
variables are tested namely interest rate, Islamic deposit rate,
inflation, income as well as financial crisis. Cointegration test and
impulse response functions are utilized to examine the long run and
short run relationship among the variables. The period of analysis is
from December 2000 to January 2011 (122 number of observation-monthly
data). The results show that crisis has no significant impact on the
volatility of Islamic banks deposits. This suggests that the Islamic
banks’ expansion towards the real economic activities by partnership
contracts is one of the best practices. It depicts also that depositors
have a strong believe towards the resilience of Islamic banks against
financial crisis and thus, they did not withdraw their money excessively
during the crisis. However, it is also found that interest rate and
income are still dominating the people’s decision to deposit their funds
in Islamic banks which in turns, indicating the effectiveness of the
anti-riba campaign in Indonesia is still low and thus, the strategy of
educating the people need to be redesigned.
(source)
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