The Impact of Interest Rate on Bank Deposits Evidence from the Nigerian Banking Sector

Ojeaga, Paul and Ojeaga, Daniel and Odejimi, Deborah O. (2013): The Impact of Interest Rate on Bank Deposits Evidence from the Nigerian Banking Sector.

Abstract

The study investigates the effect of interest rates on customer savings behavior in the Nigerian banking sector, after identifying a host of factors that are likely to influence customer confidence in commercial banks such as average income, commercial lending, legal rights strength, central bank monetary policy and total annual commercial bank losses, using quantile regression estimation method, a non parametric estimation process that is based on the premise that the sample median will tend to that of the distribution and addresses issues of heteroscedastic errors and data stringency associated with the data used in the study under question. We find that interest rates were probably increasing bank deposits while income was also found to affect bank deposits in general.

• Item Type: MPRA Paper
• Language: English
• Keywords: Interest rates, bank deposits, income, loan growth, bank losses and monetary policy
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E43 - Interest Rates: Determination, Term Structure, and Effects; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies; G - Financial Economics > G2 - Financial Institutions and Services; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation

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