BANK COMPETITION AND DEPOSITS IN INDONESIA BANKING INDUSTRY: THE ROLE OF CENTRAL BANK POLICIES

The main goal of this research is to investigate the factors influencing bank deposits in Indonesia between 2010 and 2023 by analysing data from 92 banks using the Panel Generalized Method of Moments (GMM). The study examines how bank competition levels, central bank policies, and other factors such as macroprudential policies and bank size impact deposit accumulation trends. The findings suggest that increased competition among banks is impacting deposits, which highlights a potential tension between competition and the stability of deposits in the banking sector. Alternatively, maintaining policies and appropriate regulations is crucial for instilling confidence in depositors, as macroprudential policies, bank size, credit, and capital all have a positive impact. We also expect the bank's determined interest rates and reserve requirements to have an effect. This underlines the responsiveness of deposit accumulation to shifts in policy. These findings can provide insights for policymakers and bank executives in Indonesia to enhance stability and optimize deposit-taking procedures within the banking industry