Munich Personal RePEc Archive

What are the drivers of islamic bank deposits ? evidence from Malaysia

Osman, Fatimah and Masih, Mansur (2017): What are the drivers of islamic bank deposits ? evidence from Malaysia.

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Abstract

The Islamic banks have had a steady growth particularly since the financial crisis of 2007-2008. It is , therefore, pertinent to ask what the drivers of Islamic bank deposits are. This paper is focused on answering that question. The standard time series techniques are employed for the analysis. Malaysia is taken as a case study. The findings evidenced in the vector error-correction model and Generalized variance decompositions tend to indicate that Islamic bank deposits (SDI) are mainly driven, among others, by the Kuala Lumpur composite index (KLCI), rates of return on Islamic deposits (ROR), base lending rate (BLR) and money supply (M3) These findings have strong implications for the Islamic bank depositors and policy makers.

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