Abstract
Here’s the text with improved spacing for readability, keeping the words unchanged: This study investigates the behavioural aspects of Islamic bank depositors in a dual–banking system. By categorizing the depositors into groups by the amount of their deposited funds, we estimate the responses of different deposit groups to interest rate changes. We take the findings of conventional banks as a comparative baseline and investigate the extent to which the changes in different Islamic depositor groups differentiate from conventional depositor groups. The findings suggest that depositors in both Islamic and conventional banks respond to interest rate changes in aggregate terms. Group–wise analysis indicates that Islamic bank depositors are even more responsive when deposit size gets larger. When an Islamic bank depositor’s opportunity cost gets higher due to interest rate changes, they do not hesitate to withdraw their deposits. This relationship is more robust in Islamic banks than in conventional banks.
Original language | English |
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Publication status | Published - 2015 |
Externally published | Yes |