Open AccessOwnership Structure, Bank Capital and Bank Lending/Financing Behaviour in a Dual Banking System
Author(s) -
Nor Faezah Ghazi Ahmad,
Nor Aiza Mohd Zamil,
Rohaida Basiruddin,
Sarah Athirah Saruchi
Publication year - 2019
Publication title -
international journal of engineering and advanced technology
Language(s) - English
Resource type - Journals
ISSN - 2249-8958
DOI - 10.35940/ijeat.e1034.0585c19
Subject(s) - financial system , business , finance , dual (grammatical number) , order (exchange) , financial crisis , islam , capital (architecture) , economics , art , history , philosophy , literature , theology , archaeology , macroeconomics
Credit supply in the market is crucial in order to ensure sustainable real production can survive in the market as well as to strengthen economic activity. Therefore, it is not surprising that when the financial crisis occurred in 2008 to 2009, policymakers continued to use a variety of mechanisms such that banks could continue to maintain their credit supply. Nevertheless, risk sharing based on the business model that was adopted by Islamic banks displayed different behaviour from the conventional banks. Based on prior studies, the stability of financing growth by Islamic banks as compared to lending growth of conventional banks showed the model used by Islamic banks was more capable of effectively withstanding the financial crisis. Therefore, research into the quality of lending and financing is important to understand the growth of bank lending and financing behaviour in the market. Hence, the main objective of this study is to review the effect of ownership structure, bank capital and bank lending including financing behaviour in Islamic versus conventional banks. In addition, this study proposes a conceptual framework to further comprehend the decisions made in undertaking ownership structure, bank capital and lending in the dual banking system.