scholarly journals The Influence of Inflation, Exchange Rates, Car And NPF to Stability of Islamic Banks in Indonesia Period 2015-2019

2020 ◽  
Vol 9 (1) ◽  
pp. 29
Author(s):  
Gumilang Budi Laksa pratama ◽  
Kusnendi Kusnendi ◽  
Suci Aprilliani Utami
Keyword(s):  
Banking Sector ◽  
Negative Relationship ◽  
Capital Adequacy ◽  
Internal Variables ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Vector Error Correction ◽  
Banking Stability ◽  
The Government ◽  
The Stability

This study aims to see the extent of the influence of the level of Inflation (CPI), Exchange Rate (kurs), Capital Adequacy Ratio (CAR) and Non Performing Financing (NPF) on the Stability of Islamic Banks in Indonesia Period 2015-2019. To support research, we use the Vector Error Correction Model (VECM) methodology. VECM test results show that in the short term the significant effect on the level of stability are Kurs and CAR, with the direction of a negative relationship (reducing the level of stability). Meanwhile, in the long term the significant effect on the level of stability are inflation and Kurs with the direction of a negative relationship (reducing the level of stability). From the results of this study it can be concluded that the macroeconomic variables significantly affect the stability of Islamic banking, therefore the government has an important role in controlling macroeconomic turmoil to maintain Islamic banking stability. Besides that, the internal variables of the banking sector are considered to have no significant effect partially, therefore it is necessary to conduct further research with a variety of internal factors in the banking industry to prove their effects on the stability of Islamic banking

scholarly journals COMPETITION, DIVERSIFICATION, AND STABILITY IN THE INDONESIAN BANKING SYSTEM

2021 ◽  
Vol 24 ◽  
pp. 59-88
Author(s):  
Mudeer Ahmed Khattak ◽  
Mohsin Ali ◽  
Baharom Abdul Hamid ◽  
Muhammad Umar Islam
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Portfolio Diversification ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Banking Stability ◽  
The Stability ◽  
The Impact ◽  
Important Policy Implication ◽  
Conventional And Islamic Banks

We examine the impact of competition and portfolio diversification on banking stability for conventional and Islamic banks in Indonesia. We find that the Islamic banking sector is less stable, when compared to the conventional banking sector. Competition in the banking sector reduces stability, while diversification enhances it. We find that competition negatively impacts the Islamic banks, but diversification has no impact on these banks. An interesting finding is that competition and diversification complement each other in enhancing the stability of the Indonesian banking sector. These findings carry an important policy implication for the banking sector of Indonesia.

The Systemic Effects of Prudential Regulation Toughening:The Results of a Stress-test for Russian Banks

2012 ◽  
pp. 4-31 ◽  
Author(s):  
M. Mamonov ◽  
A. Pestova ◽  
O. Solntsev
Keyword(s):  
Financial Services ◽  
Banking Sector ◽  
Stress Test ◽  
Credit Market ◽  
Capital Adequacy ◽  
Government Support ◽  
Government Ownership ◽  
Prudential Regulation ◽  
The Government ◽  
The Stability

The stability of Russian banking sector is threatened by three negative tendencies - overheating of the credit market, significant decrease of banks capital adequacy ratios, and growing problems associated with banks lending to affiliated non-financial corporations. The co-existence of these processes reflects the crisis of the model of private investments in Russian banking sector, which was observed during the last 20 years. This paper analyzes the measures of the Bank of Russia undertaken to maintain the stability of the banking sector using the methodology of credit risk stress-testing. Based on this methodology we conclude that the Bank of Russias actions can prevent the overheating of the credit market, but they can also lead to undesirable effects: further expansion of the government ownership in Russian banking sector and substitution of domestic credit supply by cross-border corporate borrowings. The later weakens the competitive positions of Russian banks. We propose a set of measures to harmonize the prudential regulation of banks. Our suggestions rely on design and further implementation of the programs aimed at developing new markets for financial services provided by Russian banks to their corporate and retail customers. The estimated effects of proposed policy measures are both the increase in profitability and capitalization of Russian banks and the decrease of banks demand for government support.

Exploring the role of corruption and money laundering (ML) on banking profitability and stability: a study of Pakistan and Malaysia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qamar Uz Zaman ◽  
Kinza Aish ◽  
Waheed Akhter ◽  
Syed Anees Haidder Zaidi
Keyword(s):  
Money Laundering ◽  
Random Effect ◽  
Negative Relationship ◽  
Content Type ◽  
Regression Techniques ◽  
Banking Stability ◽  
The Government ◽  
The Stability ◽  
The Relationship

Purpose The purpose of this paper is to address the effect of corruption and money laundering (ML) on banking profitability and stability. Design/methodology/approach This study uses the panel data of 72 banks of Pakistan and Malaysia from 2012–2018. This paper uses fixed effect (FE) and random effect (RE) regression techniques for empirical testing and generalized methods of moment (GMM) technique for robustness tests. Findings This study founds consistent evidence that corruption has a positive and ML has a negative relationship with the banking profitability of Pakistan and Malaysia while the empirical evidence suggests that corruption and ML have a diverse impact on the banking stability of Pakistan and Malaysia. Further, this paper also founds that corruption and ML moderates the relationship between risk and banking profitability and stability. Practical implications The results reveal that the banks of the highly corrupt environment are more affected by corruption and ML than the least corrupt environment. Thus, it is recommended that the Government of Pakistan should formulate strong anti-corruption and anti-money laundering policies. Originality/value As per the knowledge of the authors, this research contributes to understanding the role of corruption and money laundering on the stability and profitability of Pakistan and, in general, it is the first attempt investigating the moderating role of corruption and ML between risk and banking profitability and stability.

scholarly journals OVERVIEW OF BSI DIGITALIZATION IN CREATING A HEALTHY COMPETITIVE MARKET BY OPTIMIZING EXISTING STATE-OWNED BANK CUSTOMERS

2021 ◽  
Vol 4 (2) ◽  
pp. 110
Author(s):  
Alivia Fitriani Hilmi
Keyword(s):  
Banking Sector ◽  
Swot Analysis ◽  
Descriptive Analysis ◽  
T Test ◽  
Competitive Market ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Quantitative Descriptive Analysis ◽  
The Government ◽  
Quantitative Descriptive

Indonesia has great potential for the development of the Islamic banking industry. However, the reality shows that this potential increase runs contrary to the development of Islamic banking. The concept of policies that have been set by the government has not been able to persuade the public to use Islamic banking. Therefore, the government implemented the latest policy, namely the merger of Islamic banks by providing one mobile banking. Where there is a merger of Islamic banks accompanied by digitalization, it automatically makes Indonesian Islamic banks a holding bank with larger capital, practical, efficient and easily recognizable. The merger of Islamic banks will strengthen the Islamic banking sector which is predicted to be able to move the real sector and have the highest assets. with the existing potential, the authors conducted research on the development of sharia bank customers by optimizing the digitalization of BSI with the potential for existing BUMN bank customers who have not used sharia services with a healthy competitive market. The research method used is SWOT analysis, as well as quantitative descriptive and simple linear regression T test withobservation data random sample. SWOT matrix analyzed the results also indicate one or mergers quadrant Islamic banks must maintain an aggressive strategy by leveraging the dominance of one bank BUMN.Selain existing customers, the result of quantitative descriptive analysis based on the calculation likert and intervalscale,72% of 60 respondents agreed to the item – a questionnaire item that refers to the creation of a healthy competitive market with the existence of BSI digital banking. From the results of the T test, it shows that there is an influence between the digitalization of banking mergers of Islamic banks on the optimization of existing customers of state-owned banks.

scholarly journals PENYELESAIAN SENGKETA PERBANKAN SYARIAH OLEH PENGADILAN AGAMA KOTA BATAM PASCA PUTUSAN MAHKAMAH KONSTITUSI NOMOR 93/PUU-X/2012

2019 ◽  
Vol 18 (2) ◽  
pp. 269
Author(s):  
Agus Riyanto ◽  
Rizki Tri Anugrah Bhakti
Keyword(s):  
Banking Sector ◽  
Substantial Improvement ◽  
Reference Source ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Community Needs ◽  
The World ◽  
The Government ◽  
Religious Courts ◽  
Very High

<p><em>Islamic banking is experiencing growth both in Indonesia and in the world. In Indonesia, the growth of the number of Islamic bank offices continued to grow</em><em>. </em><em>This shows that community needs for Islamic banks are very high. The government of course has to deal with this development. The most substantial improvement is the existence of policies regarding the regulation of Islamic banking. This is very important because the banking sector is very sensitive, especially the possibility of a dispute between the customer and the bank is also quite large. These disputes must eventually be resolved by both parties, namely the bank and the customer because both of these parties have the same position as the parties concerned. This study aims to describe the competence of the Religious Courts in resolving sharia banking disputes as well as knowing the obstacles faced by the Religious Courts in deciding Islamic banking disputes. The type of research used is empirical juridical. The results of the study can be a reference for further research and become a reference source for related subjects.</em><em></em></p><p><strong><em></em></strong><em><br /></em><em></em></p>

The Systemic Effects of Prudential Regulation Toughening:The Results of a Stress-test for Russian Banks

2012 ◽  
pp. 4-31 ◽  
Author(s):  
M. Mamonov ◽  
A. Pestova ◽  
O. Solntsev
Keyword(s):  
Financial Services ◽  
Banking Sector ◽  
Stress Test ◽  
Credit Market ◽  
Capital Adequacy ◽  
Government Support ◽  
Government Ownership ◽  
Prudential Regulation ◽  
The Government ◽  
The Stability

The stability of Russian banking sector is threatened by three negative tendencies - overheating of the credit market, significant decrease of banks capital adequacy ratios, and growing problems associated with banks lending to affiliated non-financial corporations. The co-existence of these processes reflects the crisis of the model of private investments in Russian banking sector, which was observed during the last 20 years. This paper analyzes the measures of the Bank of Russia undertaken to maintain the stability of the banking sector using the methodology of credit risk stress-testing. Based on this methodology we conclude that the Bank of Russias actions can prevent the overheating of the credit market, but they can also lead to undesirable effects: further expansion of the government ownership in Russian banking sector and substitution of domestic credit supply by cross-border corporate borrowings. The later weakens the competitive positions of Russian banks. We propose a set of measures to harmonize the prudential regulation of banks. Our suggestions rely on design and further implementation of the programs aimed at developing new markets for financial services provided by Russian banks to their corporate and retail customers. The estimated effects of proposed policy measures are both the increase in profitability and capitalization of Russian banks and the decrease of banks demand for government support.

scholarly journals Comparative analysis of Saudi sharia compliant banks: A CAMEL framework

Accounting ◽  
2021 ◽  
pp. 1119-1130 ◽  
Author(s):  
Mohammad Naushad
Keyword(s):  
Saudi Arabia ◽  
Comparative Analysis ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Financial Health ◽  
Financial Soundness ◽  
The Stability

A vibrant banking sector remains instrumental to the stability of every economy. Islamic banks are now considered as iris spuria of the banking industry. Countries such as Saudi Arabia have been hailed as the Islamic banking basin. Nevertheless, how well is this sector growing and performing in Saudi Arabia itself? This motivates us to carry out this study. The current study's key objective was to measure Sharia-compliant banks' efficiency on the CAMEL Framework, a commonly accepted framework for banks' financial health. CAMEL is fundamentally an acronym for which the first letter from the five primary segments of a bank operation is jumbled, i.e. “|C|apital adequacy, |A|sset quality, |M|anagement quality, |E|arnings ability and |L|iquidity”. The system is popularly being used for determining the financial soundness and stability of banks. The current study employs this framework to judge the financial performance of four fully Sharia compliant banks or Islamic banks in Saudi Arabia. The publicly accessible audited data of these banks over ten years was taken for analysis. From the final results of the analysis, it is found that all the banks performed stupendously well on the CAMEL framework. AlRajhi Bank was rated number one of all four Sharia-compliant banks. However other three banks namely Alinma Bank, AlBilad Bank, and Aljazeera bank have also done well and overachieved all the criterion of CAMEL's ranking. However, the study proposes a comparison of Sharia-compliant banks with conventional commercial banks. Moreover, it recommended that more banks should engage in offerings of Sharia based products.

scholarly journals PERAN BANK SYARIAH DALAM PENGENDALIAN HARGA (Studi Analisis Terhadap Perbankan Syariah di Indonesia)

2017 ◽  
Vol 1 (1) ◽  
pp. 55-74
Author(s):  
Novi Indriyani Sitepu
Keyword(s):  
Growth Rate ◽  
Business Cycle ◽  
Money Supply ◽  
Banking Sector ◽  
Financial Sector ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Public Funds ◽  
The Stability

The role of Islamic banking is very important ricently. generally Islamic banking function similar with conventional banking as intermediary financial sector and real sector.The banking sector plays a role in the stability and the growth rate of money supply in the economy.Banking capabilities in managing public funds and creating a healthy business cycle will encourage the stability of the financial system.Islamic banking businesses experienced growth be viewed from the number of banks and Islamic banks are continueing increase. However, the growth rate of assets, acceleration of the increase in the share of banking more sloping back even declined. Hence the ability of banks to manage public funds and creating a healthy business cycle will encourage the stability of the financial system.Peran perbankan syariah sangat penting bagi perekonomian saat ini. Secara umum fungsi perbankan syariah sama dengan perbankan konvensional yaitu sebagai sektor keuangan perantara dan sektor riil. Sektor perbankan berperan dalam stabilitas dan tingkat pertumbuhan uang beredar dalam perekonomian. Kemampuan perbankan dalam mengelola dana publik dan menciptakan siklus bisnis yang sehat akan mendorong stabilitas sistem keuangan. Bisnis perbankan syariah mengalami pertumbuhan dilihat dari jumlah bank dan bank syariah yang terus meningkat. Namun, menurunnya laju pertumbuhan aset, akselerasi peningkatan pangsa perbankan syariah akan semakin melandai, bahkan kembali menurun. Maka kemampuan bank untuk mengelola dana masyarakat dan menciptakan siklus bisnis yang sehat akan mendorong stabilitas sistem keuangan.

Islamic Banking Regulations in Light of Basel II

2010 ◽  
Vol 27 (1) ◽  
pp. 74-101 ◽  
Author(s):  
M. Kabir Hassan ◽  
Muhammad Abdul Mannan Chowdhury
Keyword(s):  
Financial Institutions ◽  
Banking Regulation ◽  
Capital Requirements ◽  
Basel Ii ◽  
Capital Adequacy ◽  
Regulatory Agencies ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Minimum Capital ◽  
Regulatory Standards

This paper seeks to determine whether the existing regulatory standards and supervisory framework are adequate to ensure the viability, strength, and continued expansion of Islamic financial institutions. The reemergence of Islamic banking and the attention given to it by regulators around the globe as to the implications of a recently issued Basel II banking regulation makes this article timely. The Basel II framework, which is based on minimum capital requirements, a supervisory review process, and the effective use of market discipline, aligns capital adequacy with banking risks and provides an incentive for financial institutions to enhance risk management and their system of internal controls. Like conventional banks, Islamic banks operate under different regulatory regimes. The still diverse views held by the regulatory agencies of different countries on Islamic banking and finance operations make it harder to assess the overall performance of international Islamic banks. In light of the increased financial innovation and diversity of instruments offered in Islamic finance, the need to improve the transparency of bank operations is particularly relevant for Islamic banks. While product diversity is important in maintaining their competitiveness, it also requires increased transparency and disclosure to improve the understanding of markets and regulatory agencies. The governance of Islamic banks is made even more complex by the need for these banks to meet a set of ethical and financial standards defined by the Shari`ah and the nature of the financial contracts banks use to mobilize deposits. Effective transparency in this area will greatly enhance their credibility and reinforce their depositors and investors’ level of confidence.

Analysis of Financial Performance of Public Sector Banks in India: CAMEL

2020 ◽  
pp. 097674792096686
Author(s):  
Yudhvir Singh ◽  
Ram Milan
Keyword(s):  
Public Sector ◽  
Banking Sector ◽  
Positive Impact ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Factors Affecting ◽  
Public Sector Banks ◽  
The Government ◽  
And Performance ◽  
Asset Quality

Public sector banks have been merged by the government in the last few years. This is the rationale behind conducting this study. The purpose of this article is to determine the factors affecting the performance of public sector banks in India and the interrelationship between bank-specific determinants and performance of public sector banks. In this article, we shall analyse the financial data of all the public sector commercial banks for a period spread across 11 years (2009–2019); Capital adequacy, Assets quality, Management efficiency, Earning, and Liquidity (CAMEL) has been used as a performance determinant; system generalised method of moments (GMM) analysis has been used to find the effect of determinants on the performance measurement of public sector banks; and CCA (canonical correlation analysis) has been used to find the interrelationship between the bank-specific determinants and the performance of public sector banks. The finding has important implications in terms of performance in the banking sector. Certain limitations of this study are: It is based on secondary data. The study only covers the financial aspects and not the non-financial aspects. It is found that the asset quality is negatively related with performance of public sector banks. Liquidity and inflation are inversely related to performance of public sector banks in India. Capital adequacy is positively related with banks’ performance, but inversely related with banks’ interest margin. GDP growth has a significant positive impact on banks’ performance, but inversely related with banks’ interest income. Inflation rate is inversely related with banks’ performance. Banking sector reforms are insignificantly related with banks’ performance.

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