TY  - JOUR
AB  - Purpose– The objective of this study is to investigate the impact of selected economic variables on deposits level in the Islamic and conventional banking systems in Malaysia.Design/methodology/approach– Both long‐ and short‐run relationships between these variables are measured by using advanced time series econometrics. These techniques are co‐integration and error correction framework, which are conducted within the vector autoregression framework.Findings– By applying recent econometric techniques, we find determinants such as rates of profit of Islamic bank, rates of interest on deposits of conventional bank, base lending rate, Kuala Lumpur composite index, consumer price index, money supply and gross domestic product have different impact on deposits at both Islamic and conventional banking systems. In most cases, customers of conventional system behave in conformity with the savings behaviour theories. In contrast, most of these theories are not applicable to Islamic banking customers. Therefore, there is a possibility that religious belief plays an important role in the banking decisions of Muslim customers.Research limitations/implications– As customers are sensitive to rewards, they receive from their deposits, rates of profit of Islamic system must at any time be similar to those of the conventional system. Finally, religious dimension can be considered as an important element to attract more people to deposit their funds in the Islamic system.Originality/value– To the best of the authors’ knowledge, this is the first attempt to empirically examine the depositor's behaviour in the Islamic banking environment.
VL  - 34
IS  - 9
SN  - 0307-4358
DO  - 10.1108/03074350810890976
UR  - https://doi.org/10.1108/03074350810890976
AU  - Haron Sudin
AU  - Nursofiza Wan Azmi Wan
ED  - M. Mansoor Khan
ED  - M. Ishaq Bhatti
PY  - 2008
Y1  - 2008/01/01
TI  - Determinants of Islamic and conventional deposits in the Malaysian banking system
T2  - Managerial Finance
PB  - Emerald Group Publishing Limited
SP  - 618
EP  - 643
Y2  - 2024/04/25
ER  -