Mobilization of funds in Indonesian regional banking

Abstract

The speed of mobility of public funds by the banking sector implies the conditions of economic liquidity and internal bank liquidity. The faster the mobility of funds, the more the availability of liquidity for the community, the higher banking profitability, and the lower bank's internal liquidity. The uncontrolled mobility of funds can have severe consequences for both banks and society. As an intermediary financial institution, banking plays the main role to be the intermediary institution between surplus units and deficit units. This study aims to find out the factors influencing funds mobilization by Regional Development Bank (RDB) in Indonesia. The data research is quarterly financial statement secondary data of Indonesian regional banking from 2010 to 2017. There are 26 RDBs as the sample and this research uses regression as the research method. The result shows that regional external economic variables such as GDP, Exchange Rate and Inflation, market concentration, and banking characteristics affected the funds mobilization of Indonesian RDBs. This means the pricing strategy must consider more to external and internal variables of economics. In the future, Indonesian RDBs need to develop specific deposits and credits products to maintain and increase the mobilization of funds function.

The Relationship of Macro-risk Indicators, Internal Factors, and Risk Profile of Islamic Banking in Indonesia

“…http://journal.uinjkt.ac.id/index.php/etikonomi DOI: htttp://dx.doi.org/10.15408/etk.v19i2.15528 Furthermore, the correlation between NPF and ROA produces a negative relationship of -0.988 so that an increase in NPF will reduce the profitability of Islamic banking. In contrast, the correlation of NPF with efficiency is positive 0.634, where an increase in NPF will increase efficiency, while the correlation of CAR with Capital in this case CAR is insignificant that in-line with some previous studies (Muthamimah, 2014;Hugonnier & Morellec, 2017;Jumono et al, 2020;Mukhibad et al, 2020). Analysis of the relationship between FDR and NPF is positive, where an increase in FDR will increase the NPF due to an increase in the amount of financing that can increase the risk of default (Santosa, 2011).…”