Determinants of Mudharabah Term Deposit: A Case of Indonesia Islamic Banks

Fachru Nurul Umam, Annisa Nur Salam, Achmad Rizal

Abstract


The growth of Islamic finance industries in Indonesia has shown significant improvement. The increased number of surplus units depositing their funds in Islamic banks has become a significant factor in their trust and confidence in Islamic banking products. One of the products utilized by the depositor is the mudharabah deposit product, where the Islamic bank offers higher profit compared to other types of deposit or saving. This paper aims to analyze the issues in a mudharabah term deposit in the Islamic banking industry in Indonesian Islamic banks. The issues concern more on the profit and risk in the mudharabah concept that has been applied in Islamic banks and the variables that affect the changes in mudharabah deposit product. We used the sample to analyze the issues by selecting 14 Islamic banks in Indonesia from 2011-2020.  This research uses a quantitative approach with multiple linear regression analysis methods. Several variables are considered the independent variables to know the changes in the demand of mudharabah deposits in the Islamic bank, including interest rate, profit rate, number of office or branch units, and non-performing financing. Our analysis shows that the number of offices or branch units and non-performing financing positively impact the changes in demand of mudharabah deposits, while the interest rate and profit rate have a negative impact on mudharabah deposits.


Keywords


Deposit; Islamic Bank; Mudharabah; Ordinary Least Square

Full Text:

PDF

References


Agha, S. E. U., & Sabirzyanov, R. (2015). Risk management in Islamic finance: An analysis from objectives of Shari'ah perspective. International Journal of Business, Economics and Law, 7(3), 46-52. Retrieved from https://www.ijbel.com/wp-content/uploads/2015/09/RISK-MANAGEMENT-IN-ISLAMIC-FINANCE-AN-ANALYSIS-FROM-OBJECTIVES-OF-SHARI%E2%80%99AH-PERSPECTIVE.pdf

Alawode, A.A., & Iqbal, Z. (2015). Islamic finance. Retrieved from http://www.worldbank.org/en/topic/financialsector/brief/islamic-finance

Anuar, K., Mohamad, S., & Shah, M. E. (2014). Are deposit and investment accounts in Islamic banks in Malaysia interest-free?. JKAU: Islamic Econ, 27(2), 29-58. https://doi.org/10.4197/islec.27-2.2

Archer, S., & Karim, R. A. A. (2009). Profit-sharing investment accounts in Islamic banks: Regulatory problems and possible solutions. Journal of Banking Regulation, 10(4), 300–306. https://doi.org/10.1057/jbr.2009.9

Che Arshad, D. N., & Nurfadilah, D. (2017). The factors influencing the changes of deposit in Islamic bank: Comparative study between Malaysia and Indonesia. Journal of Islamic Banking and Finance, 5(2), 37-46. https://doi.org/10.15640/jibf.v5n2a6

Financial Services Authority (OJK). (2020). Islamic banking statistics. Retrieved from https://www.ojk.go.id/id/kanal/syariah/data-dan-statistik/statistik-perbankan-syariah/default.aspx

Hassan, R., & Bello, S. A. A. (2014). The concept of mudharabah investment deposits. International Journal of Business Management & Research (IJBMR), 4(2), 63-74. Retrieved from http://www.tjprc.org/publishpapers/--1394190992-THE%20CONCEPT%20OF%20MUDARABAH%20-.full.pdf

Ismath Bacha, O. (2008). The Islamic inter bank money market and a dual banking system: the Malaysian experience. International Journal of Islamic and Middle Eastern Finance and Management, 1(3), 210–226. https://doi.org/10.1108/17538390810901140

Iwona, S. (2017). Mudaraba term deposits in Islamic banking – the crucial aspects. FINANSE Czasopismo Komitetu Nauk o Finansach PAN, 1(10), 373-382. Retrieved from http://cejsh.icm.edu.pl/cejsh/element/bwmeta1.element.mhp-6edc0ff8-d74f-4b06-8e3b-33d54700c2f6

Jaber, A. S., & Manasrah, M. S. (2017). The factors that affect to attract deposits in Palestinian Islamic banks. Asian Journal of Finance & Accounting, 9(1), 261-274. https://doi.org/10.5296/ajfa.v9i1.11020

Madebo, S.A. (2004). Factors affecting deposit mobilisation in private commercial banks: The case of Awash International Bank S.C. Thesis Master. St. Mary's University College.

Permataningayu, G., & Mahdaria, S. (2019). The effect of non-performing financing and financing to deposit ratio on Islamic banks financing in Indonesia. Asian Journal of Islamic Management (AJIM), 1(1), 28–37. https://doi.org/10.20885/ajim.vol1.iss1.art3

Pradana, Y., & Sampurno, R. D. (2013). Analisis pengaruh LDR, CAR, ROA, dan faktor eksternal perbankan terhadap volume KPR pada bank persero periode 2008-2012. Diponegoro Journal of Management, 2(3), 338-352. Retrieved from https://ejournal3.undip.ac.id/index.php/djom/article/view/3234

Prastiwi, I. E. (2020). Deposit mudarabah investment risk analysis method value at risk (VAR). International Journal of Economics, Business and Accounting Research (IJEBAR), 4(2), 373-385. https://doi.org/10.29040/ijebar.v4i02.1129

Rachmawati, E., & Syamsulhakim, E. (2004). Factor affecting mudaraba deposits in Indonesia. Working Paper in Economics and Development Studies. Center for Economics and Development Studies, Department of Economics, Padjadjaran University. Retrieved from http://ceds.fe.unpad.ac.id/publications/wopeds/289-factors-affecting-mudaraba-deposits-in-indonesia.html

Rahman, M.H. (2015). Guarantee of investment deposits in Islamic banks: A fiqhi analysis. Journal of Islam, Law and Judiciary, 1(3), 37-53.

Rosly, S. A., & Zaini M. A. M. (2008). Risk-return analysis of Islamic banks' investment deposits and shareholders' fund. Managerial Finance, 34(10), 695-707. http://dx.doi.org/10.1108/03074350810891010

Seho, M., Alaabed, A., & Masih, M. (2016). Risk-sharing financing of Islamic banks: Better shielded against interest rate risk?. The Journal of Muamalat and Islamic Finance Research, 13(2), 53-70. Retrieved from https://jmifr.usim.edu.my/index.php/jmifr/article/view/29

Sundararajan, V., & Errico, L. (2002). Islamic financial institutions and products in the global financial system: Key issues in risk management and challenges ahead. IMF Working Paper No. WP/02/192, International Monetary Fund. Retrieved from https://www.imf.org/external/pubs/ft/wp/2002/wp02192.pdf

Sutrisno. (2020). Factors affecting mudaraba deposit in Islamic commercial bank in Indonesia. Proceedings of the 17th International Symposium on Management (INSYMA 2020). https://doi.org/10.2991/aebmr.k.200127.080

Tyser, C. R., Demetriades, D. G., & Effendi, I. H. (2000). The Mejelle: A complete code of Islamic civil law. Kuala Lumpur: The Other Press,

Venardos, A. M. (2005). Islamic banking and finance in South-East Asia: Its development and future. World Scientific Books, World Scientific Publishing Co. Pte. Ltd. https://doi.org/10.1142/5751




DOI: https://doi.org/10.18196/jerss.v5i2.12445

Refbacks

  • There are currently no refbacks.



Office:
Redaksi Journal of Economics Research and Social Sciences, Gedung E2 Lantai 2, Fakultas Ekonomi dan Bisnis, Universitas Muhammadiyah Yogyakarta
Jalan Brawijaya, Tamantirto, Kasihan, Bantul, Daerah Istimewa Yogyakarta 55183

Email: jerss@umy.ac.id

Telp: +62 812-3233-6697

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.