Bank Interest Research Articles

Pengaruh Pengetahuan, Religiusitas dan Lingkungan Keluarga terhadap Minat Berkarir di Bank Syariah Dengan Memoderasi Motivasi

One of the careers that can be an option for students of Islamic Economics is a career in Islamic Banking. This study was conducted to analyze the influence of Islamic bank knowledge, religiosity, and family environment on interest in a career in Islamic banks, with motivation as a variable of moderation. The population in this study comprised 164 students of the Islamic Economics Study Program, with a sample of 116 students selected using a simple random sampling method. Data collection was carried out by distributing questionnaires in the form of Google Forms. The data analysis techniques performed in this study included instrument validity and reliability tests, classical assumption tests such as normality tests, multicollinearity tests, and heteroscedasticity tests. Hypothesis testing included multiple linear regression tests and MRA tests. The results of the analysis using the SPSS 26 program showed that knowledge of Islamic banks, religiosity, and family environment significantly influence career interest in Islamic banks. However, the motivation variable could not moderate the influence of Islamic bank knowledge, religiosity, and family environment on career interest in Islamic banks. This indicates that while these factors are important, motivation alone does not strengthen their impact on career interest in this field.

Prospects and challenges of mobile banking in Bangladesh: A case study

Mobile banking is a technology advancement that enables convenient, anytime, anywhere access to financial services. When using mobile banking, customers can access banking services via their phones without having to wait in line. It is a branchless kind of banking. The purpose of the study was to identify the prospects and challenges facing Bangladeshi mobile banking in the twenty-first century. Over 80 respondents were selected using Yaro Yamani formula from a sample of bank clients and bankers and given a standardized questionnaire. The study's goal has been perceived through the application of the descriptive research approach. Based on the study's findings, people's interest in mobile banking is growing daily due to its advantages. Certain banks do not presently offer all mobile banking services, and not all respondents are aware of all the mobile banking options available. Fast data transfer and cost-effective usage are two factors that entice customers. Some of the disadvantages of mobile banking are that it is very expensive, private, complex, etc. Lowering operational risks and increasing consumer confidence in Bangladesh's mobile banking services can be achieved through robust technical information control and security procedures that ensure the integrity and confidentiality of financial transactions.

Interest Rate Risk Modelling Using Semi-Heavy Tail Distributions of Normal Variance-Mean Mixtures: A Study on Central Bank of Kenya Interest Rates

Derivative prices such as options and bond prices as well as swaps depend on the distributional assumptions of the underlying economic variables, normally, interest rates. The risk associated with changes in interest rates may worsen the value of the contract that depend on it since the values of these assets (derivative contracts) are affected directly by the fluctuations in interest rates. The distribution of interest rates, therefore, needs to be well understood to reduce the risks of losses associated with it. The Binomial Option pricing model assumes that interest rates are constant throughout the life of the option. Another common assumption of the underlying economic variables is that their returns are normally distributed with constant volatility. These assumptions have been used in pricing derivatives and currencies and has led to over-pricing and in some cases under-pricing. The models of the Normal Variance-Mean Mixtures used in this research shows better performance than the normal distribution. Weekly 91-day and commercial bank interest rates are used from 1991 to 2021. This study will provide a better model for interest rates to avoid mispricing. We find that the 91-day Treasury Bills interest rates follow a Generalized Hyperbolic distribution while the Commercial Bank interest rates follows a Normal Inverse Gaussian distribution. G.A.R.C.H model is then used in forecasting under each of the above findings. A 99pc Value at Risk is then computed for the two models and calculates the minimum expected returns in the subsequent months. This research forms a foundation for the development of advanced pricing models that incorporates the fluctuations of interest rate in the pricing industry. We conclude that the Normal Inverse Gaussian and Generalized hyperbolic distributions provide better fits than the assumed normal distribution.

Measuring the U.S. monetary noise shocks

AbstractAgents' beliefs regarding future monetary policy changes influence their current decisions. However, these expectations may not always materialize in the future. This study shows that the monetary fundamental shocks (exogenous changes consistent with expectations) stabilize output and inflation, while the noise shocks (biased beliefs that fail to be realized in the future) increase economic fluctuations. Moreover, factors that amplify financial frictions—the spread between the capital return of entrepreneurs and the risk‐free interest rate of a central bank—can increase anticipation effects associated with these two types of monetary policy shocks.

“A Study On Loans And Advances At DavangereHarihara Urban Sahakara Bank”

One important part of the Davangere-Harihara Urban Sahakara Bank's business is meeting the financial requirements of its clients via loan and advance services. The bank's loan portfolio is characterized by a high percentage of customers being assessed to pay tax, indicating a stable customer base. The majority of customers avail loans within a short period, suggesting a demand for quick access to credit. The bank's interest rates are deemed satisfactory by a significant majority of customers, and the loan approval process is generally well-received. However, there is room for improvement in providing clear repayment information and reducing paperwork. Customer satisfaction with the bank's services is high, with a significant percentage of customers willing to take another loan from the bank. This loyalty can be leveraged by offering incentives and loyalty programs. To enhance its loan and advance services, the bank should focus on reducing processing time, improving the loan approval process, and providing clear repayment information. Additionally, offering flexible repayment options and competitive interest rates can help attract and retain customers

Firm Characteristics, Interest Rate And Financial Performance Of Microfinance Banks In Kenya

Microfinance Banks gives the forte to improve the economic activity of low-income individuals and eliminate poverty, resulting in economic progress. However, microfinance's Banks financial performance in Kenya has declined over time. The objective of this study is to investigate firm characteristics, interest rate and financial performance of microfinance banks in Kenya. The study was grounded on buffer capital, efficiency structure and interest rate parity theories. The study research methodology rested on positivism research philosophy. Research design was explanatory non-experimental design. Secondary panel data was utilized. 13 microfinance banks in Kenya were target. Information was gathered using secondary data sources from microfinance banks accounting report from 2016 to 2022. Data was analysed using descriptive and inferential statistics. The study used multiple regressions and Pearson’s Product Moment Correlation analysis. All ethical considerations were appropriately observed. Findings indicated that adequacy of capital exerts a notable and direct effect on financial performance, underscoring the importance for microfinance banks in Kenya to prioritize maintaining sufficient capital levels to support their overall stability and financial outcomes. Conversely, quality of asset demonstrates a significant and adverse influence on performance financially, highlighting the need for microfinance banks to enhance their credit assessment processes to ensure the quality of their loan portfolios. The research revealed that efficiency of management has an insignificant direct influence on financial performance of Microfinance banks. To address this, microfinance banks are advised to invest in comprehensive management training programs and capacitybuilding initiatives to improve operational effectiveness and decision-making processes. Earning ability, on the other hand, exhibits a considerable and direct influence on financial performance. Microfinance banks should thus focus on continuous innovation of their products and services to enhance their earning potential and overall financial outcomes. Liquidity levels exhibit an insignificant and inverse effect on the financial performance outcomes. To mitigate potential risks, microfinance banks should establish comprehensive policies and procedures to monitor and manage liquidity effectively. Interestingly, the study reveals that the connection concerning firm-level attributes and financial outcomes for microfinance institutions in Kenya does not appear to be subject to a substantial moderating influence from interest rate movements. Therefore, the survey recommends that microfinance banks concentrate on improving governance structures, operational efficiency, risk management practices, and asset quality. This can be achieved through capacity-building programs, training initiatives, and adopting best practices from successful microfinance institutions. Strengthening these firm characteristics will enable microfinance banks to enhance their financial performance, irrespective of interest rate fluctuations

Factors Influencing Public Interest in Using Sharia Microfinance Institution Produsts in Lamongan

Islamic Microfinance Institutions (IMI) have a strategic role with their main function being to collect funds from people with excess funds and channel the funds to people in need effectively and efficiently. The existence of IMI is expected to help people, especially those from the lower middle class, in gaining access to funding. However, the perception and attitude of the community towards bank interests and the profit sharing system show diversity. Some people still choose to accept interest and consider it the same as the profit sharing system, so an analysis of factors that influence the community's interest in using IMI products is needed. The purpose of this study was to determine the effect of knowledge, promotion, service quality, and religiosity on the community's interest in using IMI products in Lamongan. The sample used was 100 samples selected using the purposive sampling method. The data was processed using multiple linear regression analysis techniques. The test results stated that partially and simultaneously, the variables of knowledge, service quality, promotion, and religiosity had a positive effect on the community's interest in using IMI products in Lamongan.

Effect of Economic Risk Sources on the Quality of the Business Environment in the SME Segment: A Case Study from the Slovak Republic

The aim of the article is to define and quantify the impact of specific economic risk sources on the quality of the business environment (QBE). The subject of the analysis was the evaluation of the impact of selected economic risk sources, including the macroeconomic environment, monetary policy and interest rates, and corporate financing on the QBE. Data was collected between 2018 and 2022 using an online survey method. A total of 480 SMEs from the Slovak Republic’s business environment completed the questionnaire. Advanced statistical techniques, including descriptive statistics, correlation analysis, and linear regression analysis, were employed to evaluate the statistical hypotheses. The empirical results yielded several significant findings. All examined sources of the macroeconomic environment, such as the level of basic macroeconomic indicators, the state of the macroeconomic environment in the context of starting a business, and innovation activities of SMEs, determine the QBE. Other key factors that positively influence the quality of the business environment include: stabilization of the business environment by the central bank's monetary policy; the level of bank interest rates on the innovation activities of companies and availability of bank loans. The findings are significant not only for the SME segment itself and their owners and top managers but also for national-level institutions along with non-profit organizations assisting in improving the entire SME segment in the business environment.

ANALYSIS OF BUBBLES ASSETS FOR WEIGHTED AVERAGE INTEREST RATES APPLIED TO BANK LOANS

This study examines the existence of the "bubble effect" in the average interest rates of loans applied by banks to various types of loans for consumers. The purpose of this article is the research of the bubble formations in the average interest rates applied by the banks to consumer, housing (home), vehicle, and commercial loan types. This article examines the existence of bubbles in the average loan interest rates of banks in Turkey using the GSADF unit root test developed by Phillips et al. (2015). Bubble assets are analyzed with weekly data for the period June 2019–March 2023. Monte Carlo simulations performed obtained critical values for the GSADF unit root test. The results show that the bubble effect on housing loan interest rates is statistically significant at the 0.05 level. Against this, although the existence of a bubble effect in consumer, vehicle, and commercial loan interest rates has been determined, these bubbles are statistically insignificant.

Japan's Lost Thirty Years: From Post-War Miracle to Bursting Bubble

Japan has achieved remarkable economic success since the 1950s, and there are consequences when Japan grows too fast, even up to a certain point. The signing of the Plaza Accord was the decisive factor in determining Japan's future economic destiny, but the Japanese at that time only focused on the growth of the exchange rate and ignored their own policy mistakes. The Japanese government even thought it was a "godsend" at one time that year, and the yen's exchange rate began to be seriously overvalued. At the same time, this also led to Japan's industrial hollowing out. Here, it could be argued that Japan signed the agreement in the mistaken belief that the economy would be great in the future. Therefore, this paper discusses whether the Plaza Accord was a determinant of Japan's economic growth between the post-war period and the bursting of the bubble by analyzing the impact of the three major industries, the yen exchange rate and the central bank interest rate, as well as consumption on GDP. It can be concluded from the analysis that the Plaza Accord was only a trigger, and Japan had an interest rate policy blunder and an overly-rapid exchange rate appreciation in those years. Therefore, the policy blunder was the main reason that pushed Japan into the abyss. From Japan's experience, for the rest of Asia, it is important not only to insist on policy independence but also to avoid the hollowing out of high-precision industries.

Application of Moderation Value on Legal Attitudes to Transact with Conventional Banks

This article aims to analyse the legal attitude of the community towards conventional bank interest and the application of this legal attitude in society. Islam forbids all forms of transaction applications of buying and selling or lending with usury systems. However, the mechanisms and systems of modern banking transactions are not yet known comprehensively in Islam and give rise to differences of opinion among Muslims. This difference of opinion is inseparable from their paradigm of thinking, namely textual and contextual ways of thinking. This case can be categorised as a matter of ijtihâdiyyah khilâfiyyah. This difference of opinion is very likely to occur because the rules of muamalah matters are actually allowed in sharia and become haram (forbidden) until there is evidence that prohibits it. Problems arise when the understanding that is believed to be related to sharia economic law, so that it feels that its understanding is the absolutely correct understanding, and then considers it a mistake if there are other people's opinions differ from it. The emergence of intolerant polemics like this can spark the fire of discord and cause distorted perceptions in the community related to religious harmony. Using a sociological approach, this article analyses the legal attitude towards conventional banks and its application in social life. The results of the study show that moderation is needed in viewing differences in legal attitudes related to bank interest so as to present a tolerant dogmatism of society and be able to avoid divisions due to intolerant attitudes.

Sharia Economic Law Criticism on Muhammad Syahrûr’s Hudûd Theory Regarding Bank Interes

n modern economics applied by conventional financial institutions, the interest system is inseparable. Economic system based on sharia principles emerged as a solution to riba-based (usury-based) transactional activities, which in sharia economic law is in the khilafiyyah (dissent) territory amongst scholars regarding whether the conventional bank interest is riba which is prohibited by Islamic law. A figure named Muhammad Syahrûr came up and offered his theory of limits (nazhariyyah al-hudûd) in providing riba limitations in the Quran. This research aims to describe M. Syahrûr's thoughts on bank interest based on his theory of limits, and to analyze it based on the review of sharia economic law (fiqh muamalah mâliyyah). this reseach is understood as a literary study research which is a research on secondary materials. The type of data used in this research is secondary data, which is literature focusing on the thoughts of a figure, which is Muhammad Syahrûr.The result of the research shows that Muhammad Syahrûr's opininion that allows the practice of bank interest based on his theory of limits (nazhariyyah al-hudûd) is a marjûh (weak) opinion, since it is not supported by valid arguments and it also contradicts the opinions of the jumhur ulama (the majority of the scholars).

Study of the Financial Feasibility of a Dairy Farming Business after the FMD Outbreak in Kampung Susu Lawu, Plaosan District, Magetan Regency

<p><strong>Objective:</strong> An outbreak of Foot-and-Mouth Disease (FMD) in Indonesia targeted ruminants, notably impacting dairy cows and precipitating a significant downturn in milk production during the year 2022. This research aimed to determine the financial feasibility and break-even point of post-FMD dairy farming within the Kampung Susu Lawu livestock group in Plaosan District, Magetan Regency.</p><p><strong>Methods:</strong> Employing a quantitative descriptive method, this study utilized survey techniques involving 50 dairy farmers affiliated with the Livestock Group of Kampung Susu Lawu. The data analysis encompassed investment analysis, including the Benefit Cost Ratio (BCR), Net Present Value (NPV), Internal Rate of Return (IRR), Pay Back Period of Credit (PPC), and Break-Even Point (BEP).</p><p><strong>Results:</strong> The findings revealed a BCR value of 1.49, NPV amounting to IDR 38,888,178.00, IRR at 26.36%, PPC of 3.46 years, BEP pegged at IDR 33,043,062.00/year, and BEP based on the unit set at 7,396 liters of milk/year. Financial analysis indicated a positive NPV, a BCR exceeding 1, an IRR surpassing prevailing bank interest rates, and a PPC duration of 3.46 years, collectively affirming the financial feasibility of the dairy farming business.</p><p><strong>Conclusions:</strong> This investigation shows that the post-FMD smallholder dairy business is economically feasible. Farmers stand to accrue benefits by surpassing the production threshold of 7,396 liters of milk/year or by maintaining a herd of productive dairy cows numbering more than three.</p>

Risk Assessment of Banks and Financial Institutions When Interest Rate Hikes

This article delves into the multifaceted risks precipitated by a bank's decision to increase interest rates. It commences with an overarching overview contextualized within The Times, elucidating the significance of the subject matter. Subsequently, it delineates various extant risks, each accompanied by a succinct exposition and an outline of corresponding mitigation strategies. Following this introductory phase, the article conducts a meticulous analysis of these identified risks, methodically dissecting liquidity risk, reputation risk, market risk, and systemic risk. Each risk is meticulously defined, substantiated with historical precedents, and elucidated with comprehensive management methodologies. This paper underscores the myriad risks attendant to a bank's interest rate hike. This synthesis serves to underscore the overarching theme that such policy decisions not only reverberate through the financial ecosystem but also necessitate vigilant risk management protocols to safeguard against potential ramifications. Finally, the article concludes by summarizing the numerous risks posed by a bank's interest rate hike. It emphasizes the need for careful consideration and proactive risk management to mitigate potential consequences.

Information disclosure strategies and bank interest rates pricing decisions

A joint decision-making model for debt financing and operations is constructed in this study. The proposed model is designed so that enterprises can actively adjust the transparency of private information while considering the risks of corporate bankruptcy, bank premium behavior, and possible damage to the product market. We systematically analyzed the mechanisms of bank interest rate pricing, corporate information transparency, and corresponding stocking strategies. We examined the impact of the companies’ inventories and transparency of different types of information on bank interest rates, which revealed financing and management-related decision-making issues based on the bank’s interest rate response function. Various levels of information transparency are appropriate for companies in the context of debt financing. We discuss the impact of changes in exogenous parameters in the product and financial markets on the basis of global equilibrium, as well as corporate characteristics affecting optimal decision-making.

International interest rate comovements and monetary policy in Bazil

This article shows that international spillovers or coordination in central bank interest rate setting are significant components of the Brazilian Taylor rule. For this, the short-term interest rate comovements of 28 countries and Euribor were estimated through a dynamic factor model. A nonlinear reaction function for the Central Bank of Brazil that includes global and regional factors evidenced that monetary policy in Brazil is influenced by the policy of other broad groups of countries and not just the United States and the Eurozone.

The Implications of the Countercyclical COVID-19 Policy on the Performance of Rural Banks and Sharia Rural Banks in Indonesia

This study investigated the impact of the Indonesian government policies implemented through POJK No. 11/POJK.03/2020 on the banking performance of Rural Bank (BPR) and Sharia Rural Bank (BPRS) after the implementation of countercyclical policies to stimulate the country's economy affected by the COVID-19 pandemic in Indonesia between March and December 2020. Mixed method approaches were applied to analyze the contributing factors to different performances between seven Rural Banks and seven Sharia Rural Banks in West Sumatra that were randomly selected through purposive sampling based on proportionate assets. The quantitative data were financial statements sourced from the OJK 2021 Publications, and the qualitative data were collected from in-depth interviews with eight Directors of Rural Banks and Sharia Rural Banks selected from the snowball sampling. Analyzing Indonesian government policies embodied in the countercyclical policy, we found that banking policies in Sharia Rural Banks outperformed those of conventional Rural Banks, as reflected by the average ROA (1.16% vs 1.33%), ROE (0.09% vs. 0.08%), and NPL (6.67% vs. 6.82%). The contributing factor to this gap was the different internal policies of each institution to translate the countercyclical concept based on the operational principles, such as the interest rate of Rural Bank and margin of Sharia Rural Bank despite the fact that both banks shared practice in the principal deferment and credit extension.

The influence of knowledge and religiosity on saving interest in Islamic banks among Ponorogo residents

IntroductionPonorogo is a region in East Java Province, located 200 km southwest of Surabaya bordering Central Java. With a population of 973,269, Ponorogo is predominantly Muslim and known for its numerous Islamic boarding schools. This study examines the influence of knowledge and religiosity on interest in saving in Islamic banks among Ponorogo residents.ObjectivesThe objective of this research is to determine the effect of knowledge and religiosity on the interest in saving at Islamic banks among the people of Ponorogo.MethodThe study employed a quantitative method with a descriptive approach, using primary data obtained through questionnaires distributed to 400 respondents. Statistical analyses were performed to evaluate the data.ResultsThe findings show that both knowledge and religiosity significantly influence interest in saving at Islamic banks, both partially and simultaneously, at a significance level of less than 0.05. The high level of knowledge and religiosity among respondents positively affects their interest in saving in Islamic banks.ImplicationsThese results highlight the importance of enhancing financial literacy and religious awareness to boost the use of Islamic banking services. This study suggests that Islamic banks should focus on educational campaigns to increase public knowledge and leverage religious values to attract more customers.Originality/NoveltyThis study provides insights into the combined effect of knowledge and religiosity on saving behavior, particularly in a region with a strong Islamic cultural background. This study contributes to the understanding of the factors influencing the adoption of Islamic banking services.

Religiosity, Knowledge, and Satisfaction on Students' Saving Decisions: A Moderating Effect of Interest in Islamic Banks

This study aims to determine the effect of religiosity, knowledge, and satisfaction on saving decisions in Islamic banks with interest as an intervening variable with a case study of Greater Solo students. This study employed quantitative methods using primary data. The sampling technique used was simple random sampling. Data collection was done by distributing questionnaires via Google Forms. The sample size was 200 students from Solo Raya. This study used the SMART-PLS analysis tool with the Partial Least Square Structure Equation Model (PLS-SEM) analysis model. The results of SEM-PLS research prove that religiosity and satisfaction significantly affect interest in saving in Islamic banks. Knowledge has no significant effect on interest in saving in Islamic banks. Interest, religiosity, and satisfaction significantly affect saving decisions at Islamic banks. Interest has a significant effect in mediating religiosity and satisfaction on saving decisions at Islamic banks. Meanwhile, interest does not affect the mediating effect of knowledge on saving decisions in Islamic banks. The research has implications for proving the low level of student knowledge regarding sharia financial literacy, by encouraging student awareness regarding sharia financial literacy in sharia financial practices. Increasing sharia financial literacy will contribute to improving the sharia economy.

Asymmetries in the interest rate channel in inflation-targeting Latin American countries

This paper presents, first, a theoretical model that, by highlighting that commercial banks with market power are able to positively pass on to their clients variations in their costs and, furthermore, that the strength with which they can do so is in turn asymmetrically related to the elasticity of the demand for loans exhibited by those clients, explains the asymmetric empirical findings shortly described. Secondly, it empirically investigates the pass-through of monetary policy rates (MPR) changes into the consumer and commercial loans interest rates set by commercial banks in four Latin American countries with inflation targeting (IT) schemes, namely (in alphabetic order) Brazil, Chile, Colombia, and Peru, over a homogeneous period. To do so, it estimates Non-Linear Auto-Regressive Distributed Lag (NARDL) models for each country. Then, we find two types of important asymmetric responses in the interest rate channel of IT monetary policy. The first is that the long-run response of the consumer loans interest rates following increases in the MPR is greater than that of the commercial loans interest rates. The second is that, in general, when the demand is relatively more elastic (as in the case of commercial loans) then the banks interest rates tend to exhibit a greater response when the central bank lowers the MPR than when it raises it.