Tracing the asymmetry of religiosity-based loyalty of Islamic bank depositors

  • Received September 17, 2022;
    Accepted December 22, 2022;
    Published January 9, 2023
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  • Article Info
    Volume 18 2023, Issue #1, pp. 1-13
  • Cited by
    4 articles

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Religiosity is one of many essential aspects that stands as the motivation of people’s behaviour. Its importance expands to the field of banking, especially Islamic banks that take Islamic teaching as their backbone. This study aimed to seek religiosity motivation among Islamic bank depositors by exploring the possible asymmetric effect of interest rates on the type of deposits. By using the NARDL approach, this study investigates the relationship between the conventional deposit interest rate on the type of depositors and deposit maturity by using monthly data from April 2015 until March 2020 of Indonesia’s Islamic banks. The results show that government deposit in Islamic bank is not affected by the raise of interest rate. In addition, all deposits that showed the possibility of asymmetry effect indicated that the increase of interest rate (LIR+) has a positive coefficient. In general, Indonesian Islamic bank depositors’ are religiously loyal and not attracted to the fluctuation of interest rates. The result also found that short-run asymmetric dynamics show convergent to long-run asymmetry after an average of 15 months. As for the policy implications, stakeholders must ease the regulation of Islamic banks such as the conversion of conventional banks to Islamic banks, since it is proven that customers are mainly religiously driven.

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    • Figure 1. Dynamic multipliers of all significant estimations
    • Table 1. Descriptive statistics
    • Table 2. Unit root test
    • Table 3. Bound test for asymmetric cointegration
    • Table 4. Wald test of long-run and short-run asymmetry
    • Table 5. NARDL long-run asymmetry result
    • Conceptualization
      Fauzul Hanif Noor Athief
    • Formal Analysis
      Fauzul Hanif Noor Athief
    • Methodology
      Fauzul Hanif Noor Athief
    • Software
      Fauzul Hanif Noor Athief
    • Writing – original draft
      Fauzul Hanif Noor Athief
    • Data curation
      Aminudin Ma’ruf
    • Funding acquisition
      Aminudin Ma’ruf
    • Investigation
      Aminudin Ma’ruf
    • Project administration
      Aminudin Ma’ruf
    • Resources
      Aminudin Ma’ruf
    • Writing – review & editing
      Aminudin Ma’ruf