Maya Panorama (2016) Efficiency On Islamic Business Unit In Indonesia
Indonesia with the huge amount of Muslims has lot of potential in develop Islamic banking system. Higher motivation in acceleration progress of Islamic banking is followed by specific regulations made by Bank Indonesia. One of the regulation is about simplicity to establish the sharia system under conventional banks that we are familiar with Islamic business unit. This endorsement was followed by almost all banks in Indones ia, both commercial banks and regional banks to open Islamic business unit. However, when it comes to efficiency then there is a difference between these two banks even though both of them are Islamic business unit. This study‟s objectives are to measure t he efficiency level of Islamic business unit in Indonesia in RB and CCB and to identify the rank of Islamic Business unit in RB and CCB. Using a quarterly balanced panel data set from period 2005 until 2014; this research used Data Envelopment Analysis to measure the efficiency. Efficiency value that we measured is divided into the overall Technical Efficiency (TE), the Pure Technical Efficiency (PTE) and the Scale Efficiency (SE). To make the rank of efficiency of each Islamic Bank used the Anderson and Pe terson Super Efficiency Method.The result on efficiency found that Islamic Business unit still M efficient. We suggest that inefficient bank should learn from their benchmark and manage their input and output effectively
Keywords : Regional Bank, Commercial Bank, Islamic Business Unit, Efficiency, Rank
 Haz, Hamzah. (2003). Sharia Banking System, An Instrument To Accelerate Nation Empowernment. In Seminar Proceedings No 46, Islamic Financial Architecture, Risk Management & Financial Stability, IRTI, Bank Indonesia, Jakarta, Indonesia. [2 ] Ibid . [3 ] Ibrahim, M. (2003) Strategy To Develop Islamic Banking, The Indonesia Scene, In Seminar Proceedings No 46, Islamic Financial Architecture, Risk Management & Financial Stability. IRTI, Bank Indonesia, Jakarta Indonesia [4 ] Ibid. [5 ] Budiono. (2003). Measuring Sustainable, Development In Indonesia, Genuine Savings and Changes In Wealth Per Capita, East Asian Development Network (Eadn) Annual Forum, 10 - 11. [6 ] Azuan, S.J. (2003). Islamic Bankin g Risk Management, Regulation & Supervision. In Seminar Proceedings No 46, Islamic Financial Architecture, Risk Management & Financial Stability, IRTI, Bank Indonesia, Jakarta Indonesia. [ 7 ] Kettell, B. (2010). Islamic Finance In A Nutshell,A Guide For Non Specialist. John Wiley & Sons. UK. [ 8 ] Kettell, B. (2011). Case Studies In Islamic Banking & Finance. Wiley Finance. [ 9 ] Farrell, M.J. (1957). The Measurement Of Productive Efficiency. Journal Of The Royal Statistical Society . Series A (General), 120, 253 - 290. [ 10 ] Ibid . [ 11 ] Berger, A.N. & Humphrey, D.B. (1991). The Dominance of Inefficiencies Over Scale and Product Mix Economies In Banking. Journal Of Monetary Economics , 28, 117 - 148. [ 12 ] Coelli, T. J. (1996). Measurement of total factor productivity gro wth & biases in technological change in Western Australian agriculture. Journal of Applied Econometrics , 11 (1), 77 - 91 [1 3 ] Banker, R. D.; Charnes, A.; & Cooper, W.W. (1984). Some Models For Estimating Technical and Scale Inefficiencies In Data Envelopment Analysis. Management Science , 30 (9), 1078 - 1092. [ 14 ] Farrell, M.J. op.cit . [1 5 ] Charnes, A., Cooper W. & Rhodes E. (1978). Measuring The Efficiency Of Decision Making Units. European Journal Of Operational Research , 2, 429 - 44. [ 16 ] Farrell, M.J. op.cit . [1 7 ] Abidin, Z. (2007). Kinerja Efisiensi Bank Umum. Proceeding. PESAT , (2). Universitas Gunadarma Jakarta. [1 8 ] Ram, M.T.T. & Ray, S. (2004). Productivity Growth and Efficiency In Indian Banking, A Comparison Of Public. Private and Foreign Banks. Department Of Economics. Working Paper No. 2004/27. University Of Connecticut. Connecticut. [1 9 ] Sathye, M. (2003). Efficiency of Banks In A Developing Economy, The Case Of India. European Journal Of Operational Research, 148, 662 – 671. [ 20 ] Al - Faraj, K.A., Bu - Bshait & Al - Muhammad, W.A.(2006). Evaluating The Efficiency Of Saudi Commercial Banks Using Data Development Analysis. International Journal Of Financial Services Management , 1 (4), 466 - 477. [21 ] Yeh, Q.J. (1996). The Application Of Data Envelopment Analysis In C onjunction With Financial Ratios For Bank Performance Evaluation. Journal Of The Operational Research Society , 47 (8), 980 - 988. [22 ] Taylor, W.M.; Thompson, R.G.; Thrall, R.A. & Dharmapala, P.S. (1997). DEA/Ar Efficiency and Profitability Of Mexican Banks A Total Income Model. European Journal Of Operational Research , 98,346 - 63.  Noulas. 2001. [24 ] Miller, S.M. & Noulas, A.G. (1996). The Technical Efficiency Of Large Bank Production. Journal Of Banking & Finance , 20, 495 - 509. [25 ] Bhattacharyya A.; Lovel l Cak & Sahay P. (1997). The Impact Of Liberalization On The Productive Efficiency Of Indian Commercial Banks. Eur. J. Oper. Res. 98(2), 332 - 345.  Avkiran. 2011. [27 ] Avkiran, N. K., & Thoraneenitiyan, N. (2010). Purging data before productivity analys is. Journal of Business Research , 63 (3), 294 - 302. [28 ] Al Khathlan, K., & Malik, S. (2010). Are Saudi Banks Efficient? Evidence Using Data Envelopment Analysis (DEA). International Journal Of Economics & Finance , 2 (2), 53 - 58. Retrieved From Http,//Www.Ccsenet.Org/Journal/ Index.Php/Ijef / Article/View/3634 [29 ] Banker & Thrall. R.M. (1992). Estimation Of Returns To Scale Using Data Envelopment Analysis. European Journal Of Operational Research, 62(1), 74 - 84. [3 0 ] Andersen, P. & N. C. Petersen. (1993). A Procedure For Ranking Efficient Units In Data Envelopment Analysis. Management Science , 39(1), 1261 – 1264. [31 ] Scheel, H. (2000). EMS, Efficiency Measurement System User ́S Manual. Version 1.3. Working Paper . Univ ersity Of Dortmund [32 ] Yayar, R., Bal, S. G., Karkacier, O., & Erol, Y. (2012). Consumer characteristics influencing natural gas consumption preference in Tokat, Turkey. African Journal of Business Management , 6 (7), 2578 - 2584. [33 ] Saliza. & Ismail. (201 2). Islamic Banking Efficiency, A Dea Approach 3rd International Conference On Business and Economic Research ( 3rd ICBER 2012). Proceeding 12 - 13 March 2012. Golden Flower Hotel. B&ung. Indonesia. [34 ] Stavarek & Reskova. (2011). Efficiency In The Czech Banking Industry, A Non - Parametric Approach, Acta Universitatis Agriculturae Et Silviculturae Mendelianae Brunensis Volume Lx 47 Number 2. [35 ] Al - Hussain. (2009). Corporate Governance Structure Efficiency & Bank Performance In Saudi Arabia. Dissertation . University Of Phoenix.  Andersen, P. & N. C. Petersen. Op.cit. p.1261 – 1264.  Ibid .