Sharia Risk of Government-Owned Islamic Rural Banks during COVID-19 in Indonesia
This study examines the effect of government ownership on the sharia risk of Islamic rural banks using all publicly available data of 156 BPRSs from 23 provinces in Indonesia. This research uses a quantitative method with secondary data obtained from the Financial Services Authority (OJK). Regressio...
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| Format: | Article |
| Language: | English |
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Universitas Merdeka Malang
2021-11-01
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| Series: | Jurnal Keuangan dan Perbankan |
| Subjects: | |
| Online Access: | https://jurnal.unmer.ac.id/index.php/jkdp/article/view/5859 |
| _version_ | 1828733149412065280 |
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| author | Riza Zahrotun Nisa Yunieta Anny Nainggolean Taufik Faturohman |
| author_facet | Riza Zahrotun Nisa Yunieta Anny Nainggolean Taufik Faturohman |
| author_sort | Riza Zahrotun Nisa |
| collection | DOAJ |
| description | This study examines the effect of government ownership on the sharia risk of Islamic rural banks using all publicly available data of 156 BPRSs from 23 provinces in Indonesia. This research uses a quantitative method with secondary data obtained from the Financial Services Authority (OJK). Regressions using panel data regressions are employed to analyze the relationship between government ownership and sharia risk. Non-halal income is employed to measure the sharia risk between 2019 Q4 and 2020 Q3, representing the timeline before and during COVID-19. In all models and periods, the results found a significant positive effect of government ownership variables on non-halal income. However, the degree decreases during the COVID-19 pandemic. It reveals that government-owned Islamic rural banks are found to have lower non-halal income during the pandemic. We also find that more significant firms with higher leverage tend to have higher non-halal income. This study is expected to contribute to the still thin literature on sharia risk, especially in the context of Islamic rural banks in Indonesia. Results will have implications to the regulator to assure the sharia compliance of the Islamic finance industry. This is essential to gain trust from the Islamic society, which is concerned about the observance of Islamic banks.
JEL: G21 |
| first_indexed | 2024-04-12T22:24:37Z |
| format | Article |
| id | doaj.art-fef0182378244b90b6efaeee2e98d848 |
| institution | Directory Open Access Journal |
| issn | 1410-8089 2443-2687 |
| language | English |
| last_indexed | 2024-04-12T22:24:37Z |
| publishDate | 2021-11-01 |
| publisher | Universitas Merdeka Malang |
| record_format | Article |
| series | Jurnal Keuangan dan Perbankan |
| spelling | doaj.art-fef0182378244b90b6efaeee2e98d8482022-12-22T03:14:14ZengUniversitas Merdeka MalangJurnal Keuangan dan Perbankan1410-80892443-26872021-11-0125475477510.26905/jkdp.v25i4.58592830Sharia Risk of Government-Owned Islamic Rural Banks during COVID-19 in IndonesiaRiza Zahrotun Nisa0Yunieta Anny Nainggolean1Taufik Faturohman2Institut Teknologi BandungInstitut Teknologi BandungInstitut Teknologi BandungThis study examines the effect of government ownership on the sharia risk of Islamic rural banks using all publicly available data of 156 BPRSs from 23 provinces in Indonesia. This research uses a quantitative method with secondary data obtained from the Financial Services Authority (OJK). Regressions using panel data regressions are employed to analyze the relationship between government ownership and sharia risk. Non-halal income is employed to measure the sharia risk between 2019 Q4 and 2020 Q3, representing the timeline before and during COVID-19. In all models and periods, the results found a significant positive effect of government ownership variables on non-halal income. However, the degree decreases during the COVID-19 pandemic. It reveals that government-owned Islamic rural banks are found to have lower non-halal income during the pandemic. We also find that more significant firms with higher leverage tend to have higher non-halal income. This study is expected to contribute to the still thin literature on sharia risk, especially in the context of Islamic rural banks in Indonesia. Results will have implications to the regulator to assure the sharia compliance of the Islamic finance industry. This is essential to gain trust from the Islamic society, which is concerned about the observance of Islamic banks. JEL: G21https://jurnal.unmer.ac.id/index.php/jkdp/article/view/5859islamic bankingislamic rural banknon-halal incomeownership structuresharia performancesharia risk |
| spellingShingle | Riza Zahrotun Nisa Yunieta Anny Nainggolean Taufik Faturohman Sharia Risk of Government-Owned Islamic Rural Banks during COVID-19 in Indonesia Jurnal Keuangan dan Perbankan islamic banking islamic rural bank non-halal income ownership structure sharia performance sharia risk |
| title | Sharia Risk of Government-Owned Islamic Rural Banks during COVID-19 in Indonesia |
| title_full | Sharia Risk of Government-Owned Islamic Rural Banks during COVID-19 in Indonesia |
| title_fullStr | Sharia Risk of Government-Owned Islamic Rural Banks during COVID-19 in Indonesia |
| title_full_unstemmed | Sharia Risk of Government-Owned Islamic Rural Banks during COVID-19 in Indonesia |
| title_short | Sharia Risk of Government-Owned Islamic Rural Banks during COVID-19 in Indonesia |
| title_sort | sharia risk of government owned islamic rural banks during covid 19 in indonesia |
| topic | islamic banking islamic rural bank non-halal income ownership structure sharia performance sharia risk |
| url | https://jurnal.unmer.ac.id/index.php/jkdp/article/view/5859 |
| work_keys_str_mv | AT rizazahrotunnisa shariariskofgovernmentownedislamicruralbanksduringcovid19inindonesia AT yunietaannynainggolean shariariskofgovernmentownedislamicruralbanksduringcovid19inindonesia AT taufikfaturohman shariariskofgovernmentownedislamicruralbanksduringcovid19inindonesia |