FACTORS INFLUENCING THE PERFORMANCE OF FIXED DEPOSITS AT BANK RAKYAT IN MALAYSIA

Abstract

Malaysia has been successful in implementing dual banking systems in their field in attracting more depositors. In the context of Islamic Banking, there are other operating institutions that conduct the modus operation using Islamic principles. One of them is Bank Rakyat which was established in 1954 under the Cooperative Ordinance 1948 and is the biggest Islamic cooperative bank in Malaysia. In the aspect of the popularity of their product schemes, the demand for products and services is well recognized especially the fixed deposit. No surprise, Bank Rakyat's 12-month fixed deposit is among the best available. Even with the higher demands, the schemes they offered are not PDIM-guaranteed. It is normal for studies to focus primarily on bank-specific variables, such as macroeconomic conditions, market structure, and institutional development, rather than demand for bank products. The purpose of this study was to find out what factors influence the performance of fixed deposits at Bank Rakyat. To date, a sample size consisting of 5 years of yearly data has been gathered and summarized for Bank Rakyat from 2016 until 2020 to the variables of the inflation rate, based on financing rate and profit rate. The data was then analyzed using multiple regression. It was revealed that the inflation rate and based financing rate are significant in determining the performance of fixed deposits while the profit rate is insignificantly related.