The impact of crisis and macroeconomic variables towards Islamic banking deposits

Problem statement: The nature of Islamic banks is different from conventional banks which may lead to a different deposit behavior of their depositors. This study aims to analyze the dynamic effects of interest and profit rate changes, production level, inflation and financial crisis towards the fl...

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Main Authors:	Abduh, Muhamad, Omar, Mohd. Azmi, Duasa, Jarita
Format:	Article
Language:	English
Published:	Science Publications 2011
Subjects:	HG4001 Financial management. Business finance. Corporation finance.
Online Access:	http://irep.iium.edu.my/9079/ http://irep.iium.edu.my/9079/ http://irep.iium.edu.my/9079/ http://irep.iium.edu.my/9079/1/ajassp.2011.1413.1418%5B1%5D.pdf

id	iium-9079
recordtype	eprints
spelling	iium-90792012-11-19T01:57:09Z http://irep.iium.edu.my/9079/ The impact of crisis and macroeconomic variables towards Islamic banking deposits Abduh, Muhamad Omar, Mohd. Azmi Duasa, Jarita HG4001 Financial management. Business finance. Corporation finance. Problem statement: The nature of Islamic banks is different from conventional banks which may lead to a different deposit behavior of their depositors. This study aims to analyze the dynamic effects of interest and profit rate changes, production level, inflation and financial crisis towards the fluctuation of total deposits in Malaysian Islamic banks. Approach: Using monthly data from January 2000 to December 2010, cointegration test and vector error correction model were utilized to uncover the dynamic relationship between macroeconomic variables and crisis with total deposit of Islamic banking. Results: The results show that changes in interest and profit rate as well as production growth has no significant effects. Meanwhile, inflation has negative effect on total deposits of Islamic banks which reflects the changes on depositors’ consumption pattern during the recession.Interestingly, financial crisis is positively affecting total deposits in Islamic banks. Conclusion: This study provides evidence of general consumer sentiment and deposit behavior. It indicates that in general,due to the 1997/1998 financial crisis experience, bank depositors have trusted Islamic banking to be more resilient in facing financial crisis and hence, inflow of deposits to Islamic banks was happened during 2007/2008 financial crisis Science Publications 2011 Article PeerReviewed application/pdf en http://irep.iium.edu.my/9079/1/ajassp.2011.1413.1418%5B1%5D.pdf Abduh, Muhamad and Omar, Mohd. Azmi and Duasa, Jarita (2011) The impact of crisis and macroeconomic variables towards Islamic banking deposits. American Journal of Applied Sciences , 8 (12). pp. 1413-1418. ISSN 1554-3641(O), 1546-9239 (P) http://thescipub.com/abstract/10.3844/ajassp.2011.1413.1418 10.3844/ajassp.2011.1413.1418
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG4001 Financial management. Business finance. Corporation finance.
spellingShingle	HG4001 Financial management. Business finance. Corporation finance. Abduh, Muhamad Omar, Mohd. Azmi Duasa, Jarita The impact of crisis and macroeconomic variables towards Islamic banking deposits
description	Problem statement: The nature of Islamic banks is different from conventional banks which may lead to a different deposit behavior of their depositors. This study aims to analyze the dynamic effects of interest and profit rate changes, production level, inflation and financial crisis towards the fluctuation of total deposits in Malaysian Islamic banks. Approach: Using monthly data from January 2000 to December 2010, cointegration test and vector error correction model were utilized to uncover the dynamic relationship between macroeconomic variables and crisis with total deposit of Islamic banking. Results: The results show that changes in interest and profit rate as well as production growth has no significant effects. Meanwhile, inflation has negative effect on total deposits of Islamic banks which reflects the changes on depositors’ consumption pattern during the recession.Interestingly, financial crisis is positively affecting total deposits in Islamic banks. Conclusion: This study provides evidence of general consumer sentiment and deposit behavior. It indicates that in general,due to the 1997/1998 financial crisis experience, bank depositors have trusted Islamic banking to be more resilient in facing financial crisis and hence, inflow of deposits to Islamic banks was happened during 2007/2008 financial crisis
format	Article
author	Abduh, Muhamad Omar, Mohd. Azmi Duasa, Jarita
author_facet	Abduh, Muhamad Omar, Mohd. Azmi Duasa, Jarita
author_sort	Abduh, Muhamad
title	The impact of crisis and macroeconomic variables towards Islamic banking deposits
title_short	The impact of crisis and macroeconomic variables towards Islamic banking deposits
title_full	The impact of crisis and macroeconomic variables towards Islamic banking deposits
title_fullStr	The impact of crisis and macroeconomic variables towards Islamic banking deposits
title_full_unstemmed	The impact of crisis and macroeconomic variables towards Islamic banking deposits
title_sort	impact of crisis and macroeconomic variables towards islamic banking deposits
publisher	Science Publications
publishDate	2011
url	http://irep.iium.edu.my/9079/ http://irep.iium.edu.my/9079/ http://irep.iium.edu.my/9079/ http://irep.iium.edu.my/9079/1/ajassp.2011.1413.1418%5B1%5D.pdf
first_indexed	2023-09-18T20:18:53Z
last_indexed	2023-09-18T20:18:53Z
_version_	1777407972417208320

The impact of crisis and macroeconomic variables towards Islamic banking deposits

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