Development Of Banking System Research Articles

PENYELESAIAN PIUTANG AKAD MURABAHAH MENURUT FATWA DSN NOMOR 47 TAHUN 2005: STUDI PADA BANK SYARIAH INDONESIA KCP LHOKNGA ACEH BESAR

This article aims to analyze the practice of settling murabaha receivables at BSI KCP Lhoknga with a study of Fatwa DSN-NO 47 of 2005. The fatwa provides guidance on sharia principles that must be adhered to in the settlement of murabaha receivables. The analysis is carried out on banking practices in settling murabaha receivables in community life. The aim is to ensure the development of an Islamic banking system that is free from usury. Because at this time there are still many people who think that Islamic banking and conventional banks are the same. This research is written with a conceptual approach, the type of research conducted in writing this scientific work uses a qualitative form, namely data collection in a scientific setting using scientific methods and conducted by scientifically interested people or researchers. The data used are primary data and secondary data. Primary data is obtained from interviews and observations. The results showed that the practice of settling murabahah receivables at BSI KCP Lhoknga seen from the review of DSN-MUI fatwa No. 47 of 2005 discusses the settlement of murabahah receivables for customers who are unable to pay, and the fatwa provides settlement requirements that must be followed as well as the responsibilities of customers and LKS to carry out settlements in accordance with the provisions in the fatwa. Therefore, the settlement practice has complied with the commandments of sharia principles including fairness and transparency in determining the amount of debt that must be paid by the debtor, and the fatwa which also regulates procedures when settling debts in situations of late payment or inability to pay. So, basically this contract is a direct agreement where the desired profit is predetermined. Fatwa DSN-NO 47 of 2005 explains that the settlement must be complied with, such as the object of collateral being sold by the customer at an agreed price and then the customer paying off the remaining forest to the Islamic financial institution (LKS) from the proceeds of the sale.

Features of the development of the Russian banking system in 1996-1999.

This work is devoted to the crisis quadrennial of 1996-1999 in the history of Russia and the relationship with the changes that have occurred in the Russian banking system. The author identifies two stages in the development of domestic banking: its formation in 1991-1995, which ended with the exit from the August crisis of 1995, which showed that the banking system has not yet adapted to the requirements of market reality. The second stage was the crisis four–year period of 1996-1999, the peak of which was the default and devaluation of the ruble, as a result of which the main activity of banks turned from participating in a speculative game to working with the real sector of the economy and the population. As part of the study of the second period, the author, among other things, considers the issue of anti-crisis measures taken by the Government of the Russian Federation. The author analyzes a large layer of sources and bibliographies, actually building a chronology of the development of the banking sector in Russia in 1996-1999. The novelty of this work consists in the fact that until now there are practically no generalizing historical works about the history of the banking system of Russia in the Russian historiography. The author comes to the following key conclusions: as a result of the 1998 crisis, in which there was a collapse of government securities, which are the basis of both speculative activities of credit institutions and collateral for their resource base, the banking community began to focus mainly on working with the real sector of the economy and the needs of the population. During the period under review, a reform of the banking system was carried out, including the establishment of a set of strict banking standards and reporting that serve to increase the reliability of credit institutions and the possibilities of effective regulation of their activities, and the elimination of the technical backlog of the Central Bank in the automation of control and payment spheres was carried out.

Global trends in the financial system and their impact on the banking sector of Ukraine: analysis and recommendations

The paper covers the modern global trends in the financial sphere and their impact on the banking sector of Ukraine. The research was carried out on the basis of a comprehensive analysis of global financial changes, the dynamics of technological innovations and unique challenges facing the banking system of Ukraine. The study reveals key trends in the development of the banking sector, focusing on global challenges and prospects. The modern banking system of Ukraine is in an era of significant technological changes adapted to meet the needs of customers and optimize banking processes. Ukrainian banks must respond to global trends in the financial sphere to ensure competitiveness and meet the growing demands of customers. This requires innovation, digitization and flexibility to respond to rapid changes in technology and consumer behavior. Competition for customers and leadership in innovation are among the key points. Focusing on important aspects of transformation, the scientific work contains not only a thorough analysis of modern trends, but also specific recommendations for Ukrainian banks regarding their effective adaptation to global financial trends. In order to create a strategic direction for Ukrainian banks and ensure their successful future, the authors proposed a comprehensive set of recommended measures covering key aspects of financial activity. If these recommendations are successfully implemented, Ukrainian banks can become the foundation of a stable and innovative financial system that meets the challenges of the global market and contributes to the sustainable development of the country's economy. The paper is distinguished by highlighting not only the problems, but also the opportunities that global financial trends generate. This approach contributes to the uniqueness and value of the work from among the scientific developments in this area for specialists in the financial industry, scientists and everyone who is interested in the future development of the Ukrainian banking system.

Innovative Digital Model of the Infl uence of the Key Rate on the Profi tability of the Russian Banking System

The article considers theoretical approaches to modeling the sustainable development of the Russian banking system in the context of innovative transformations and the formation of digital ecosystems. The relevance of the study lies in the fact that in modern conditions, approaches are increasingly being used to ensure the sustainable development of the banking system based on cognitive modeling, the use of artifi cial intelligence and the formation of digital ecosystems. The scientific novelty lies in the fact that in the study, a deep learning model DL-model "Random Forest" was formed, which allows you to get a stable forecast for the net profi t of the banking system, in the conditions of innovative transformations and the formation of digital ecosystems. The practical signifi cance of the study is that the results obtained can be recommended for implementation in practice to provide support for managerial decision-making regarding the sustainable development of the banking system. The cognitive model was developed in the GraphViz environment using a semantic frame network in the form of graphs in the DOT programming language. An analysis of the dynamics of both macroeconomic indicators of the real sector of the economy and the parameters of the development of the banking sector of the Russian Federation was carried out. The criterion for the success of the predictive properties of the DL-model was the value of the average forecast error (MAE). The proposed DL model uses the best decision tree that has optimal hyperparameter settings, for example, the depth of the tree is six layers, the number of estimators (trees) in the ensemble is ten. In the experiment, the hyperparameters of the neural network did not change, the input parameters to various trees were randomly selected by the algorithm. The DL model showed high forecast accuracy.

Современные вызовы и перспективы развития банковской системы России в условиях цифровизации

The article pays special attention to modern challenges and prospects for the development of the Russian banking system in the context of digitalization of the economy and business. In particular, it is noted that the banking system of Russia (like the entire world system) is going through hard times associated with global geopolitical and economic sanctions. Such concepts as “digital economy”, “real sector of the economy”, “financial sector of the economy” are revealed and the close connection and interdependence between these sectors of the economy are shown. A general conclusion is formulated that digitalization has captured various segments of the economy, including banking, the real and financial sectors of the economy. Digital ruble are shown.

Crypto Currency on the Development of Nigeria Banking System with Particular Reference to the First Bank Nigeria Plc

The study examined the effect of crypto currency on the development of Nigerian banking system with particular reference to the first bank Nigeria Plc. The study specifically examined the effect of Bitcoin (BTC) payment system and Litecoin (LTC) payment system, Ethereum (ETH) payment system and Bitcoin Cash payment system on the profit for the year of first bank Nigeria Plc. Data for the study was sourced through annual reports and accounts of first bank Plc for a period of 10 years, data collected were analysed using multiple regression analysis. Result of the analysis shows that Bitcoin (BTC) payment system has a positive and significant effect on the profit for the year of first bank Nigeria Plc. It was also observed that Litecoin (LTC) payment system has a negative significant effect on the profit for the year of first bank Nigeria Plc. The study further shows that that there is a negative effect of Ethereum on Profit for the year of first bank Plc. The study further indicates that Bitcoin Cash has a positive and significant effect on Profit for the year of firs bank Plc. Several financial regulatory authorities and institutions issued casual warnings to the general public, advising of the risks of involvement in digital currencies; however, digital currencies (especially cryptocurrencies) are thriving since the number of businesses and persons who accept them as payment are increasing by the day. A significant number of people are now fully convinced that the digital currency-Bitcoin is legitimate, safe and has value. "Bitcoin is going to be transformative" but unfortunately, since it is virtually untraceable it has been used for a host of nefarious purposes. Although, digital currencies may be very attractive to cybercriminals and fraudsters and present a host of new challenges to law enforcement in Nigeria, its adoption as a tool for national development in the digital age should be widely encouraged.

ОЦІНКА СТІЙКОСТІ УКРАЇНСЬКИХ БАНКІВ

The article is devoted to topical issues of assessing the stability of Ukrainian banking institutions. The stability of the banking system of Ukraine directly depends on the stability of each individual banking institution and their ability to constantly develop dynamically, and this, in turn, is determined by the macroeconomic stability of the state and the development of the market infrastructure, which is ensured by the mandatory observance of the basic corporate principles of the organization and conduct of banking activities, which are formed in the banking system with the active participation of the National Bank of Ukraine and commercial banks. The military aggression of the russian federation in Ukraine, the instability of the international financial sector and the unfavorable development of global economic processes have a significant impact on the state and confidence of participants in the Ukrainian banking sector, and as a result, on the stability of Ukrainian banking institutions. The deterioration of the stability of Ukrainian banks is connected with a number of problematic issues, namely: distrust of banking institutions of their clients; rather high credit risks caused by the imperfect structure of the Ukrainian economy; a significant increase in factors that affect the profile of banking risks. In general, the changes that have been taking place in the economy of Ukraine recently have a rather drastic impact on the pace and directions of development of the Ukrainian banking system. It is quite clear that today the assessment of the stability of Ukrainian banks is one of the priority tasks for both banking institutions and state bodies. The approaches used today to assess the stability of banking institutions differ in the composition of factors that are taken into account, the indicators that characterize the components of stability, the permissible values of these indicators, etc. Foreign experience regarding the application of certain mechanisms and methods to assess the stability of banking institutions is not always acceptable in domestic conditions and needs some adjustment. In this regard, in modern conditions, the solution of problematic issues regarding the development and implementation of an effective system for assessing the stability of Ukrainian banks and the banking system as a whole in the context of the integration of the Ukrainian economy into the world economy is of particular relevance.

Unified Theory of Acceptance and Use of Technology (UTAUT) Model: Factors Influencing Mobile Banking Services’ Adoption in China

This study uses a modified UTAUT model to examine behavioral factors influencing mobile banking services’ (MBS) adoption in China. Despite the abundance of smart mobile phones, the uptake of mobile banking among the population remains low. To address this issue, this study integrates four variables—perceived financial cost, awareness, technology infrastructure support, and government regulations—into the UTAUT framework to explore their impact on driving the adoption of MBS. Based on convenient sampling techniques, it uses 567 valid responses collected through a self-administered questionnaire and applies multiple regression analysis methods for data analysis using SPSS-26 software. Results indicate that performance expectancy, effort expectancy, perceived financial cost, and awareness are significant drivers of behavioral intention to use MBS in China. Technological infrastructure support positively influences performance expectancy, and individuals’ intent to use and adopt MBS in China. Government support significantly drives the individual’s behavioral intention to use and adopt MBS. Furthermore, behavioral intention to use MBS significantly predicts its adoption in China. The practical and academic ramifications of MBS on the growth and development of sustainable mobile banking systems are presented.

FROM THE HISTORY OF THE ECONOMIC JUSTIFICATION AND OPENING OF THE BRANCH OF THE STATE BANK IN THE TOWN OF KINESHMA IN THE EARLY 20TH CENTURY

This article is devoted to the study of the economic justification and actions to opening a branch of the State Bank in the town of Kineshma in the early 20th century. This process was quite specific, since it was not just extended in time, which allows us to speak of its periodisation, but it also differed in the professional affiliation of the initiators of the opening. If at the first stage, these were representatives of the business community – at the second stage, these included the manager of Ivanovo-Voznesensk branch of the State Bank. About 10 years had passed between these events, Russia passed the stage of revolutionary upheavals, and its economy began to develop actively again. The regional policy of the State Bank had also changed. Increasing attention has been paid to its presence in developing economic regions through the opening of the branches of the Bank in them. Moreover, as a result of the development of the commercial banking system, competition in the lending market has intensified, which also justified the need to expand the sphere of influence on the part of the State Bank. In fact, these actions carried out the credit and banking registration of Ivanovo-Kineshma industrial region, which arose in the 1910s. This article has been prepared on the basis of documents from the Russian State Historical Archive, which have been introduced into scientific circulation for the first time. It makes it possible to strengthen the understanding of the role of the branches of the State Bank in the development of regional industry intended for researchers of its history during the imperial period.

Institutional mosaic of financial institutions in the late Qing China and synthesis of organizational forms: from piaohao and qianzhuang to the central bank

Objective: to determine the peculiarities of forming the banking system in late imperial China in terms of the interaction between traditional Chinese banking institutions, imported institutional forms, and state reform strategies. Methods: qualitative methods (comparative analysis, generalization), historical and genetic method.Results: based on a wide array of historical data, the history of the Chinese banking system development during the Qin dynasty decline is demonstrated. By the time of the Chinese economy “forced opening” by Western powers during the Opium Wars, China had its own quasi-banking institutions based on the established clan networks of trade organizations that covered the credit needs of the traditional economy. The local development of modern industries in China required modern approaches to the organization of banking activities. The lacuna was filled by foreign banks, which actually monopolized modern banking in China, and later by state-owned banks. It is shown that by the end of the Qing period all three participants of the banking industry – traditional banks, foreign banks and state banks – covered the needs of the Chinese economy. It is concluded that the banking industry of the late imperial period was a mosaic institutional fabric, combining both traditional and westernized elements and embedding clan ties traditional for China.Scientific novelty: the article is the first attempt in Russia to comprehensively examine the evolution of the banking system of late Qing China.Practical significance: the main conclusions of the article can be used in scientific and pedagogical activities in the study of economic history of traditional China, and may enrich the concepts of institutional economics concerning the limits and possibilities of institutional transformations.

Cognitive Modeling of the Sustainable Development of the Banking System under the Conditions of Innovative Transformations

The article considers theoretical approaches to modeling the sustainable development of the Russian banking system in the context of innovative transformations and the formation of digital ecosystems. The relevance of the study lies in the fact that in modern conditions, approaches are increasingly being used to ensure the sustainable development of the banking system based on cognitive modeling, the use of artifi cial intelligence. The scientifi c novelty lies in the fact that in the study, a deep learning model DL-model "Random Forest" was formed, which allows you to get a stable forecast for the net profi t of the banking system, in the conditions of innovative transformations. The practical signifi cance of the study is that the results obtained can be recommended for implementation in practice to provide support for managerial decision-making regarding the sustainable development of the banking system. The cognitive model was developed in the GraphViz environment using a semantic frame network in the form of graphs in the DOT programming language. An analysis of the dynamics of both macroeconomic indicators of the real sector of the economy and the parameters of the development of the banking sector of the Russian Federation was carried out. The criterion for the success of the predictive properties of the DL-model was the value of the average forecast error (MAE). The proposed DL model uses the best decision tree that has optimal hyperparameter settings, for example, the depth of the tree is six layers, the number of estimators (trees) in the ensemble is ten. In the experiment, the hyperparameters of the neural network did not change, the input parameters to various trees were randomly selected by the algorithm.

Interdependence of the banking system development and the economic growth in the context of digitalization: Case study of Azerbaijan and its key trading partners

When choosing a country as a trading partner, an important role is played by the speed, convenience, and reliability of banking services (this is primarily determined by the level of digitalization of banking activities), and the general level of economic growth of this country. The article analyzes the relationship between the efficiency of the banking system and the country’s economic growth under digitalization using the example of Azerbaijan and its key trading partners. Calculations were made using data for 2010–2021 based on World Bank, IMF, and UN statistics. Principal component analysis was used to identify the most relevant indicators that describe the stability of the banking system, the level of economic development of the country, and the level of digitalization; the method of structural modeling was used to identify functional relationships between the constructed synthetic generalizing indicators. Calculations showed that the development of the banking system is much more (almost seven times) influenced by the level of digitalization in the country than the level of economic growth (coefficients for synthetic generalizing indicators formed in the process of structural modeling are 0.29 and 0.04). Modeling proved that the focus of reforms aimed at increasing the level of digitalization in the country should be an increase in the number of electronic accounts, electronic payments, the share of the population using the Internet, growth of R&D expenditures, and innovation index.

Sistem Teras Perbankan Dalam Ekosistem Kontrak Syariah Di Malaysia (Core Banking System in Shariah Contract Ecosystem in Malaysia)

Islamic core banking system is an enabler to banking activity that provides agile platform to achieve the corporate objective of Islamic banking as well as to meet Shariah compliance aspect. In Malaysia, Shariah compliance principle in Islamic finance has been stipulated in Part IV, Division 1, Islamic Financial Services Act 2013 (“IFSA 2013”). Nevertheless, the suitability of methodology on the development of Islamic core banking system in Malaysia is less discussed qualitatively in previous studies. Thus, the objective is to study on methodology of Islamic or Shariah contract based core banking system’s development that is suitable in Malaysia. This study found that the development of Islamic core banking system shall respect Shariah contract ecosystem in Malaysia. Shariah contract policy document issued by Central Bank of Malaysia (“BNM”) is resulting from Malaysia’s Shariah contract ecosystem in line with provisions of Shariah compliance under section 28 and 29, IFSA 2013. From these legal provisions, the stakeholders shall respect the power given to BNM, and Shariah contract policy document shall be the main reference in translating Shariah contract requirements onto each process within Islamic core banking system in Malaysia.

Board Compensation in Financial Sectors: A Systematic Review of Twenty-Four Years of Research

We aim to provide a comprehensive systematic analysis of scholarly publications in the field of board compensation in financial sectors extending through the years 1987 to 2021. Hence, the most notable themes, theories, and contributions to the literature are identified, and research developments over time are evaluated. With the identification of a final sample of 87 research papers indexed in Scopus, we identify research gaps to provide insight into future research following a systematic method. The results revealed that the United States of America received the broadest research interest, along with cross-country research. While the literature lacked to provide investigations for other countries of the world. Although the effect of compensation on organizational outcomes (performance and grow) is still unclear in the literature, several factors have been introduced as key drivers of the compensation, including the country’s level of development, the development of equity markets, the development of banking system, its dependence on foreign capital, collective rights empowering labor, the strength of a country’s welfare institutions, employment market forces, and social order and authority relations. On a theoretical level, agency theory has been most popular in the literature, along with providing multiple theoretical frameworks with agency theory as a slack resources theory, managerial talent theory, and managerial power theory. This is the first research to our knowledge that used a systematic review (SR) of literature to give a complete and comprehensive evaluation of the literature on board compensation in the financial sector. The current study documents the flow of literature on the board’s compensation in the financial sectors over 24 years and establishes future research opportunities.

Internet Banking System

Abstract: The rapid advancement of technology has revolutionized the way financial transactions are conducted, leading to the increasing popularity of internet banking systems. This research paper focuses on the development of an internet banking system using PHP, MySQL, HTML, CSS, and JavaScript. These programming languages provide a solid foundation for creating a secure, user-friendly, and feature-rich banking application. The paper explores the architecture, functionalities, and security measures employed in building the internet banking system, as well as the advantages and challenges associated with its implementation. By leveraging the power of these programming languages, banks can offer their customers convenient and accessible online banking services while ensuring the highest standards of security and reliability. The findings of this research will contribute to a deeper understanding of the technical aspects involved in developing internet banking systems and provide insights into best practices for successful implementation.

INTERRELATIONSHIP OF INFLATION, EXCHANGE RATE AND INTEREST RATES IN THE CONTEXT OF HUNGARY'S STRATEGIC POLICY

INTERRELATIONSHIP OF INFLATION, EXCHANGE RATE AND INTEREST RATES IN THE CONTEXT OF HUNGARY'S STRATEGIC POLICY

Repercussions of the Silicon Valley Bank collapse on global stock markets

We employ an event study method to examine the impacts of the collapse of a prominent tech industry bank, Silicon Valley Bank (SVB), on global stock markets. The collapse triggered panic and uncertainty, leading to significant negative returns worldwide. The magnitude of the impact was more pronounced within developed markets due to the higher level of integration and interdependence with the global economy, where we find significantly high abnormal volatility. Further, the impact of the SVB collapse was not uniform across all countries, and those with robust banking system development and stability were impacted differently.

Emerging Trends and Opportunities in the Changing Banking Scenario: A Study of Developing Countries

A developed banking system is now very well established, including many kinds of banks, including public sector banks, foreign banks, both old and new private sector banks, regional rural banks, and cooperative banks with funding from the Reserve Bank of India. The banking sector is expanding at a rate that has never been seen before, and it is becoming more diverse than at any other time in the history of banking. In most developing nations, bank assets make up well over 80% of all financial sector assets, although these percentages are noticeably lower in established markets. More than two-thirds of his banking assets are held by the five largest (often local) banks in the majority of developing nations. The alteration in the nature of the dominant structure in the landscape is of utmost importance. Since the 1980s, banks have grown in size and the range of their operations, with some developing into very large institutions dispersed across the nation. This essay analyzes the changes and advancements in the Indian banking sector.

ANALYSIS OF THE EFFICIENCY OF FUNCTIONING OF THE BANKING SECTOR OF UKRAINE

The banking system has always been essential to the country’s economy. Moreover, it is essential in the current economic conditions because to stabilize the financial and economic situation in Ukraine, a reliable, working and developed banking system is necessary. To ensure it, it is necessary to study the efficiency of the banking sector of Ukraine and identify the factors that affect it. This determines the relevance of measures to reform the banking system, considering the current situation. The article summarizes the concept of “efficiency of banking activity,” identifies the factors that affect the level of efficiency and considers the criteria for assessing the efficiency of banks depending on the subjects of banking activity. The dynamics of the number of existing banks during 2015-2022 are analyzed, and the leading indicators of banking activity and the results of banks’ activity are considered. The directions of improving the efficiency of banks, in particular, the growth of income, reduction of costs, and reduction of risks associated with the performance of banks’ duties are proposed. To increase the profitability of the bank, the following measures can be proposed: 1) to increase the bank’s funds, which will contribute to the growth of the bank’s resource base and, accordingly, their investment potential; will be one of the prerequisites for attracting foreign investment; will stimulate integration processes; will ensure the bank’s independence and create conditions for the survival of banks in a period of increased competition in the market; 2) the bank’s funds should be rationally and efficiently placed to ensure its financial stability. Fulfilling this condition will eliminate contradictions between liquidity, reliability, and profitability; 3) financial planning. Banks incur many costs as a result of uncoordinated actions of different departments among themselves. The financial plan allows for the forecasting of the bank’s income, expenses, and profit for the year. Moreover, although in the current conditions in our country, due to instability, and inflation, accurate data may differ significantly from the plan, the proportions remain virtually unchanged. The banking institution should see the prospects of its development and goals for the current year; 4) form sufficient insurance reserves and reserve funds. Since the main reason for bank failures is the non-repayment of previously issued loans, the formation of these funds will strengthen the bank’s reliability and stability, and hence the banking system of Ukraine, and reduce possible financial risks in lending activities. The creation of these reserves will guarantee the coverage of accounts in the bank’s activities and help maintain its liquidity at the required level; 5) to apply such instruments in banking activities that allow both planning and obtaining additional profit. We are talking about futures, options, forward currency transactions, and other forms of activity that meet the conditions of market relations; 6) systematically and comprehensively study credit risks and take measures to reduce them. To this end, it is necessary to organize credit risk management departments; 7) improve professionalism. Thus, due to the war and unstable economic situation in Ukraine, the efficiency of the banking sector has significantly decreased. The efficiency of the banking system is influenced by the following factors: ownership structure in the banking sector; changes in operating activities; share in the deposit market; capitalization of banks, etc. Banks’ profits decreased by 72.44%, while expenses increased by 62.86%. Therefore, it is necessary to develop an effective mechanism to increase revenues, reduce costs and use the profits. It is also necessary to identify ways to increase profitability, which will reduce risks and increase the banking system’s profitability.

The Effects of the Interactions Between Agro-Production, Economic, and Financial Development on Bank Sustainability

The Sub-Saharan African region encounters a deficiency in agricultural financing, which can be attributed to its constraints in accessing international investments in general and the low engagement of bank risk-taking in particular. This situation leads to underproduction, which exacerbates poverty and malnutrition in the region. Thus, this study investigates the impact of the interaction effects between agricultural production, economic development (ED), and financial development (FD via FDI and DC) on bank stability ratios across 40 countries, encompassing 350 operational banks, during the period covering 2010 to 2019. The research employs the Generalized Method of Moments (GMM) technique and verifies its consistency with Two-Stage Least Squares (2SLS) and the Z-Score Approach. The results highlight two findings: first, the interaction effects between economic development, agricultural production, and financial development factors have significantly greater impacts on bank sustainability than their individual effects without interactions. Secondly, these interaction effects sustain significantly bank stability in two ways: on the one hand, they increase bank returns (through both ROE and ROA), while on the other hand, they reduce bank riskiness (via negative effects on NPL and positive effects on LLR). The study concludes that those interaction effects significantly sustain the stability of the African banking system. The SS African states (via their central banks) should promote farming finance services and enforce a minimum ratio of farming loans for each commercial bank’s credit portfolio as a solution to the investment deficiency in the sector. Hence, this can solve food production level issues, ensure food security, and effectively sustain both the banking system and real economic development.