The Analysis of Factors that Influence Relative Efficiency of General Banks after the Implementation of Indonesia Banking Architecture

Abstract

One of implementations that is done by Bank Indonesia to reach the vision of Arsitektur Perbankan Indonesia (API) is by determining anchor bank criteria and good performance bank criteria. Those criterias are determined from various aspects such as some ratios that consist of CAR, NPL, LDR, ROA, and the banking assets. These determinations are expected to be an encouragement for banks in Indonesia to improve the banking efficiency. The measurement and the efficiency analysis are done by implementing Data Envelopment Analysis (DEA) method through the approach of efficiency intermediation that is oriented toward output. This efficiency value will be the dependent variable in analysing the next regression that is done by applying the tobit regression. The independent variables that are applied in the regression are CAR, NPL, LDR, ROA, asset, SBI rate, inflation, and the Rupiah exchange toward Dollar. This research involves 108 conventional banks during 2004-2011 in Indonesia. The result of the efficiency measurement showed that Indonesia banking is not efficient in doing its function as the financial intermediator. The hypothesis testing result from tobit regression showed that the variables that influence the bank efficiency with 5% signification are CAR, NPL, the exchange rate, SBI rate, and inflation. Macro variables has bigger and more significant influence toward the intermediation efficiency compared with micro variables. Among micro variables CAR, LDR, NPL, ROA, and total asset, only CAR and NPL have significant influence in affecting intermediation efficiency. It happens because the measurement that is used in efficiency inputs outputs are partial finance ratio where banks can manage it, so that the real bank performance can not reflected well.