Conventional Banks Research Articles

The Association between Credit Risk Management and Banks’ Performance in Bangladesh: A Panel ARDL Approach

This paper aims to empirically investigate both the long-run and short-run association between credit risk management and commercial banks’ performance of Bangladesh by employing a panel data collected from 23 Dhaka Stock Exchange (DSE) listed conventional commercial banks over a period of 13 years spanning from 2008-2020. The study incorporates capital adequacy ratio (CAR), non-performing loan ratio (NPLR), and geographical loan concentration ratio (GLCR) as the indicators of credit risk management, while considering return on asset (ROA) as the performance measure. The results indicate that there is a significant positive long run as well as short-run relationship between CAR and ROA. In addition, the study reveals a short-run negative relationship between NPLR and ROA. The study suggests that commercial banks may maintain sufficient capital to absorb any substantial loan loss without collecting any emergency funds.

Interconnectedness between Islamic and conventional banks: a multilayer network view

PurposeThis study aims to examine information (stock return, volatility and extreme risk) spillovers and interconnectedness within dual-banking systems.Design/methodology/approachUsing multilayer information spillover networks, this paper conduct a deep analysis of contagion dynamics among 24 Islamic and 46 conventional banks from 2006 to 2022.FindingsThe findings show the network’s rapid response to financial shocks. Through cross-sector analysis, this paper identify information spillovers between and within Islamic and conventional banking systems. Furthermore, this research illustrates distinct roles played by Islamic and conventional banks within the multilayer network structure, contingent upon the nature of the financial shock.Practical implicationsUnderstanding the differential roles of Islamic and conventional banks in information transmission can aid policymakers and financial institutions in devising more effective risk management strategies, thereby enhancing financial stability within dual-banking systems.Originality/valueThis study contributes to the literature by emphasizing the necessity of examining contagion mechanisms beyond traditional single-layer network structures, shedding light on the shadow dynamics of information transmission in dual-banking systems.

PENGARUH MODAL KERJA, CASH FLOW DAN TOTAL ASET TERHADAP NILAI PERUSAHAAN DENGAN PROFITABILITAS SEBAGAI VARIABEL INTERVENING PADA PERUSAHAAN BANK KONVENSIONAL YANG TERDAFTAR DI BEI PERIODE 2020-2022

Banking companies are financial institutions whose job is to collect funds from the public in the form of deposits and then channel them back to the public in the form of credit or other things to advance the community's economy. Conventional banks themselves are banks that carry out their activities according to national and international regulations. This study aimed to determine the effect of working capital, cash flow and total assets on firm value with profitability as an intervening variable. This study uses quantitative and descriptive research. The population used in this study were 41 conventional bank companies listed on the IDX for the 2020-2022 period. The sampling technique used in this study was purposive sampling. Data analysis and hypothesis testing in this study using Smart PLS 3.0. The results of the direct effect test using the Smart PLS 3.0 application show that working capital has a positive but insignificant effect on profitability, cash flow has a negative but insignificant effect, total assets have a negative but insignificant effect, working capital has a positive but insignificant effect on firm value, cash flow has a negative but insignificant effect on firm value, total assets have a positive but insignificant effect on firm value, profitability has a negative but significant effect on firm value. The indirect effect hypothesis test results show that the working capital variable has a negative but insignificant effect on firm value through profitability, cash flow has a positive but insignificant effect on firm value through profitability, and total assets have a positive but insignificant effect on firm value through profitability.

PENGARUH OPASITAS BANK TERHADAP TINGKAT PERTUMBUHAN KREDIT DI MODERASI OLEH VARIABEL KAPITALISASI BANK, WHOLESALE FUNDING, MACROECONOMY CONDITION, DAN KUALITAS KREDIT (Studi Empiris pada Bank Umum Konvensional yang terdaftar di BEI 2018-2022)

This study aims to investigate the effect of bank opacity on loan growth rates by considering the role of bank capitalization variables, wholesale funding, macroeconomic conditions, and credit quality as moderating factors. The empirical study was conducted on Conventional Commercial Banks listed on the Indonesia Stock Exchange (IDX) during the period 2018-2022. The research method uses multiple regression analysis and moderation techniques by utilizing financial and macroeconomic data sourced from bank financial reports in Indonesia. The results of this analysis can provide insight into the impact of bank opacity on loan growth, while explaining the extent to which the variables of bank capitalization, wholesale funding, macroeconomic conditions, and credit quality moderate the relationship. The findings of this study are expected to contribute to the understanding of the factors that influence credit growth in the banking sector, particularly in the context of bank opacity. The practical implications of this study can help regulators, bank management, and other stakeholders to develop appropriate policies to improve the stability and growth of the banking sector. Keywords: bank opacity, loan growth, bank capitalization, wholesale funding, macroeconomic conditions, credit quality.

Pengaruh Rasio Capital Adequacy Ratio, Net Interest Margin, Non Performing Loan Terhadap Return on Asset Bank Konvensional Periode 2014 - 2022

This research serves to fill in the gaps in knowledge from previous studies that discuss different opinions about each ratio. The focus is on the phenomenon of gaps in the relationship between ROA and bank financial performance. The purpose is to evaluate the effect of Capital Adequacy Ratio, Net Interest Margin, and Non Performing Loan on ROA both separately and together at these banks during the period 2014-2022. This research method is a quantitative approach purposive sampling technique to select a sample consisting of five leading conventional banks in Indonesia. The results of the analysis using multiple linear regression and hypothesis testing, the effect of Capital Adequacy Ratio on ROA is not significant, Net Interest Margin has a significant positive effect on ROA, Non Performing Loan on ROA has a significant negative effect, Capital Adequacy Ratio, Net Interest Margin, Non Performing Loan as a whole has an effect on ROA.

Perspektif Etika Bisnis Islam Terhadap Pengelolaan Peternakan Ayam Di Desa Pinggir Air

Considering that the egg products of purebred chickens of farmers in waterfront villages have not been able to meet the standard needs of around 20% of the local market needs, so that purebred chicken eggs are imported from outside the region to meet egg needs. The lack of supply from within this area is not able to meet local needs, making the opportunities for the waterfront village community to develop laying hen farm management very wide open. This research is to find out the Perspective of Islamic Business Ethics on the implementation of Chicken Farm Management. The research method used is qualitative research with sample determination. The key informant in this study is a chicken farmer in Pinggir Air. Non-key informants are people who are considered to know the problem being researched. The result of this study is an indicator of the management of chicken farms in Pinggir Air Village, this chicken farming business uses land and personal capital partly from loans from conventional banks. This chicken farming marketing system uses a direct marketing system. The perspective of Islamic business ethics on the implementation of chicken farm management in Pinggir Air Village has fully applied the principles of Islamic business ethics based on unity (monotheism or unity) by not leaving the essence of worship to God, as well as establishing a balance in determining fair egg prices for all consumers and being responsible and honest in determining and maintaining egg quality.

Bridging the gap? A theoretical analysis of the net effect of FinTech entry on access to credit

FinTech lenders offer an opportunity to enhance credit access but may also disrupt traditional banking. This study proposes a theoretical framework for analyzing the net impact of FinTech’s entry on access to credit in credit markets dominated by conventional banks. When a FinTech lender enters the market, competition intensifies, which reduces the bank’s gain in serving certain customer segments. While FinTech lending can help serve some unattended niches, it may cause the bank to abandon others, leading to an ambiguous or even negative impact on access to credit.

Comparison of Consumer Ethics Perception of Islamic Banking Customers with Conventional Banking Customers of Turkey: A Study from Turkish Banking System

Abstract Objectives: This study compared consumer ethics perceptions between Islamic and Conventional Banking customers in Turkey and examined the relationship between risk and ethics in both groups. Methods: A survey was conducted with 419 banking customers (276 Conventional, 143 Islamic) between March 2023 and March 2024, using the Risk Perception Scale and Ethical Behaviour Scale, along with demographic and bank usage characteristics. Results: Results showed no significant difference in total risk perception levels between the two groups (p<0.05). Islamic Banking customers exhibited significantly higher levels of passive benefitting, active benefitting, and overall ethics (p<0.05). For Conventional Banking customers, risk perception was negatively correlated with passive benefitting (r=-0.175; p<0.01), active benefitting (r=-0.184; p<0.01), and total ethics perception (r=-0.192; p<0.01). Passive benefitting significantly impacted the risk perception of Conventional Banking customers (OR=-0.06; p<0.05). Among Islamic Banking customers, risk perception was positively correlated only with deceptive legal practices (r=0.170; p<0.05), which did not significantly affect their risk perception (p>0.05). Conclusion: Islamic Banking customers have a higher level of ethical perception and prioritize ethical issues more than Conventional Banking customers. While ethical perceptions significantly influence the risk perceptions of Conventional Banking customers, they do not affect the risk perceptions of Islamic Banking customers. Keywords: Islamic banking, Risk perception, Ethics.

The Role of QR Code Technology in Revolutionizing Banking

The financial services industry has undergone a significant digital revolution, with QR code technology playing a crucial role in the development of the banking sector. Evolving from basic barcodes, QR codes have become essential tools for identity verification, secure online transactions, and financial account management. They represent a shift from conventional banking practices, offering enhanced security and user convenience. In banking, QR codes are used for account management, payments, and robust security protocols. The widespread adoption of QR codes has transformed how customers interact with banks and has led to stronger security measures for online banking. This article examines the growing use of QR codes in banking, highlighting the convenience, security, and improved customer experience these codes offer. The increasing importance of QR technology in banking is further demonstrated by emerging trends such as Data Matrix QR Codes, Blockchain-Enabled QR Codes, Secure Timestamping, Encryption, and Dynamic QR Codes.

Comparative Analysis of Bank Performance Between Bank Syariah Indonesia (Private-Shariah) and Bank Central Asia (Private-Conventional) Period of 2021 and 2022

Bank Syariah Indonesia (BSI) is the largest sharia bank in Indonesia, while Bank Central Asia (BCA) is a conventional private bank with the largest capitalization in Indonesia. The fundamental problem at BSI is a cyber attack that has an impact on the IT system, while the fundamental problem at BCA bank is that the mobile banking system will be disrupted in 2022, so researchers will compare the bank's performance in 2021 (before) and 2022 (after). The general objective of this research is to analyze the comparison of bank performance after experiencing technological obstacles from both internal and external sources, while the specific objectives are to find out whether: (1) Any difference in the performance of Bank Syariah Indonesia (Private-Syariah) between 2021 and 2022, (2) Any difference in the performance of Bank Central Asia (Private-Conventional) in 2021 and 2022, (3) Any difference in the performance of Bank Syariah Indonesia (Private-Sharia) and Bank Central Asia (Private Conventional) between 2021 and 2022. The method used in this research is RGEC (Risk Profile, Good Corporate Governance, Earning, Capital). The analytical tool used is the Wilcoxon and Mann Whitney non-parametric t-difference test. The results obtained are: 1. There is no difference in Bank BSI's performance before and after the IT problem but not constant; 2. There is no difference in Bank BCA's performance before and after the IT problem but not constant; 3. There is no difference in the performance of Bank BSI before and BCA before IT problems occur but are not constant;4. There is no difference in the performance of Bank BSI after and BCA after IT problems occur but are not constant.

M Score Performance Measure for Islamic Banks in Malaysia and Indonesia

Performance measurement is vital to examine the performance of any institution. Due to the different nature of business operations, processes, and activities in Islamic banks, they have to be measured by a more focused instrument to reflect the Shariah compliance parts and their business nature compared to the conventional banks. Hence, M Score which has been developed by Abdul Rahim, Abdul Rahman and Syed AlHabshi (2016) has been adopted in this study. The findings from the computation will indicate which country gains the higher M Score in performance, and this can be used as a benchmarking exercise. This research aims to analyse and compare the M Score performance of Islamic banks in Malaysia and Indonesia. The content analysis via Annual Reports of Islamic banks has been used for this study. The sampling technique used is purposive sampling. The research was conducted on Islamic banks in Malaysia and Indonesia over a period of two years, from 2020-2021. This comparative research is expected to be an evaluation tool for Malaysian Islamic banks, helping them improve their performance to catch up with their counterparts in Indonesia. Thus, the purpose of this research proposal is to analyse and compare the effect of the soundness of Islamic banks based on the M Score performance of Islamic banks in Malaysia and Indonesia. The results of this study indicate that Islamic banks in Indonesia have a higher M Score ranking than those in Malaysia. There are significant differences in the performance of Islamic banks based on the Need Fulfilment and Equitable Distribution (NFED), Economic Growth (EG), and Economic Stability (ES) in Malaysia and Indonesia.

Determinants of the Capital Adequacy Ratio Islamic Versus Conventional Banks in MENA Region

Determinants of the Capital Adequacy Ratio Islamic Versus Conventional Banks in MENA Region

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.

Comparing The Evidence of Liquidation Process Between Islamic Rural Banks and Conventional Rural Banks in Indonesia

Comparing The Evidence of Liquidation Process Between Islamic Rural Banks and Conventional Rural Banks in Indonesia

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).

The Effect of Capital Adequacy Ratio, Return on Asset, Loan to Deposit Ratio and Non Performing Loan on Stock Prices of Banking Companies Listed on the Indonesia Stock Exchange in the 2022 Period

This study aims to determine the effect of Capital Adequacy Ratio, Return On Assets, Loan To Deposit Ratio and Non Performing Loan on Stock Prices in Companies listed on the IDX for the 2022 Period. The research method used is a descriptive method with a quantitative approach. The population in this study is the financial statements of Conventional Banking. The data method used in this study is multiple linear regression analysis, classical assumption tests including normality tests, multicollinearity tests, heteroscedasticity tests. Significance tests include t-tests, as well as correlation coefficients and determination coefficients at a significance level of 5%. Data are processed and analyzed using the SPSS version 27 application program. The results of this study indicate that partially the Capital Adequacy Ratio has a significant negative effect on stock prices, with a Tcount value of -2.875 <0.05. Partially, Return On Assets has a significant positive effect on Stock Price, with a calculated T value (7.515) >< Ttable 2.034 with a significance value of 0.000 < 0.05. Partially, Loan to Deposit Ratio has a significant negative effect on stock price, with a calculated T value (- 3.684) < Ttable 2.034 with a significance value of 0.001 < 0.05. Partially, Non Performing Loan has a significant negative effect on Stock Price, with a calculated T value (-2.991) < Ttable 2.034 with a significance value of 0.005 < 0.05.

Analyzing Profitability Determinants in Indonesian Conventional and Islamic Banking

This article investigates the impact of financial ratios and macroeconomics on the profitability of conventional and Islamic banks in Indonesia. The study uses financial ratios as internal variables represented by CAR (X1), NPL/NPF (X2), and LDR/FDR (X3), while macroeconomics as an external variable is represented by BI7DRR (X4). The sample design used in this study includes conventional and Islamic banks from BUKU 1 and BUKU 2 in Indonesia, utilizing EViews and SPSS as analysis tools to test the proposed hypotheses. The analysis results show that CAR, NPL, and LDR have significant impacts on the ROA of conventional banks, while BI7DRR does not have a significant effect. On the other hand, in Islamic banks, only CAR and FDR significantly influence ROA, while NPF and BI7DRR do not have significant impacts. A paired sample t-test indicates a significant difference between the profitability (ROA) of conventional and Islamic banks. Based on these findings, it is recommended that conventional banks improve their management of CAR, NPL, and LDR, while Islamic banks need to focus on managing CAR and FDR, and develop innovative Sharia-compliant investment products to attract more stable funds.

Stability and Performance of Conventional and Sharia Banking in Indonesia Before and After the Covid-19 Pandemic

This study examines the impact of the COVID-19 outbreak on the performance and stability of Indonesia's dual banking system. Our sample includes the top 20 banks by assets, both conventional and sharia, from 2018 Q1 to 2023 Q3. Data for conventional banks is obtained from Bloomberg, while data for Islamic banks is sourced from each bank's official website. We use ROA, ROE, and NIM as performance variables and Z-Score and NPL as stability variables. External factors such as GDP, Inflation, BI Rate, and Exchange Rate serve as independent variables, while bank-specific variables act as controls. Panel data regression is used to determine causal relationships between these factors and banking performance and stability. We also compare bank performance and stability before and after COVID-19 using the Mann-Whitney Test. Findings indicate that the pandemic significantly affected conventional banks' Z-Score, NPL, ROA, ROE, and NIM, while only NPL was significantly affected in sharia banks. The results highlight the significant impact of GDP, exchange rate, and BI Rate on banking variables, while inflation had no effect. The type of bank significantly influences performance but not stability.

Determinants of Consumption Value on Intention to Use Shariah Mobile Banking: Exploring the Role of Consumer Preference

This study analyzes the use of mobile banking by both Islamic and conventional bank customers using the theory of consumption value. The aim of this research is to evaluate the factors influencing customers' decisions to use dual mobile banking services. The proposed hypothesis is that the intention to use Islamic mobile banking services is influenced by functional, conditional, social, emotional, and epistemic values mediated by consumer preferences. The method used is structural equation modeling with partial least squares (SEM-PLS) with a sample of 191 people, all of whom use both conventional and Islamic mobile banking. The results show that the theory of consumption value does not directly affect the interest in using mobile banking, either conventional or Islamic, except for the emotional value variable. Consumer preferences mediate the effect of functional, conditional, emotional, and epistemic values on the intention to use conventional mobile banking. Meanwhile, conditional, emotional, and epistemic values influence the interest in using Islamic mobile banking, which is mediated by consumer preferences. These findings indicate that the consumer's intention to use mobile banking is influenced by the theory of consumption value regardless of whether the service is Islamic or not. The implication of this research is that Islamic mobile banking services need to improve their service quality by considering consumer preferences and the theory of consumption value, thereby enhancing the usage of services by both conventional and Islamic bank customers.

Design of Coin Sensor based Mobile Charging System

Abstract—Today, mobile phones play an important role not only in the modern world of communication, but also in our daily lives. The mobile phone business is currently worth billions of dollars and supports most features of all mobile phones with different operating systems. Therefore, running these phones requires a public charge, which should be useful to the general public. Hence, keeping mobile phones charged has become a more significant task. In this project, we designed a prototype for mobile battery charging on coin insertion. A coin-based mobile charging system provides an alternate solution to all mobile users for charging their mobile phones during travelling or emergency where they may not have access to conventional power banks. This system can be used by shop owners, the general public and can be implemented in public places like railway stations and bus stand to provide mobile charging facilities. This system can also be implemented in commercial complexes, colleges, and offices. This coin based mobile charging system charges the mobile phone when the valid coin is inserted. So the coin acceptor used recognizes the coin inserted and signals the Arduino Uno for further action. When a coin is inserted, it signals the Arduino Uno and starts charging the mobile phone providing a 5V power supply through the charging slot. The Arduino Uno starts a reverse countdown timer to display the charging time . left for that mobile phone using LCD display. Further the user adds another coin, the Arduino Uno adds to the currently remaining time and once again decrements the countdown. Keywords: Arduino Uno, coin-based mobile charging system, LCD display, mobile phone. Index Terms—Arduino Uno, coin-based mobile charging system, LCD display, mobile phone.