THE DETERMINANT OF MUDHARABAH DEPOSIT SHARING PROFIT IN INDONESIAN ISLAMIC BANKING

Abstract

The potential of Islamic banking in Indonesia is overgrowing along with the increasing public understanding of Islam. In Islamic Banking, various products have been offered to attract the interest of the public. However, the most popular product is savings because it is the safest product for high yields. Mudharabah deposits are fundraising products that provide the largest proportion of total third-party funds. This study aims to compare the results of a comparison between finances represented by the Non-Performing Financing (NPF) and the Return on Investment (ROI) for the profit-sharing in mudharabah deposits. The type of method used in this research is the quantitative descriptive method. The data source is obtained from secondary data sourced from monthly reports issued through all Islamic banks' websites in Indonesia or the official BI website from 2008 to 2017. The results of this study indicate the NPF variable is not following the short and long-term plans for profit sharing of deposits mudharabah. Moreover, the ROI variable has a significant positive effect on the short and long-term results of mudharabah deposits. This research concludes that in the short and long term, NPF is not intended for results. It relates to the bank having a good reserve and analyzing the issues that need to be considered. Meanwhile, ROI is attractive towards revenue sharing because more increase the bank revenue gives the rising impact of income.