THE EFFECT OF THE CASH  RESERVE RATIO ON THE PERFORMANCE OF JORDANIAN BANKS

Abeer Al Abbadi

THE EFFECT OF THE CASH RESERVE RATIO ON THE PERFORMANCE OF JORDANIAN BANKS

Author(s)

Dr. Abeer Fouzan Aref Al-Abbadi¹, Dr. Ahmad Hamed Al Manasir², Dr. Nedal Khaled Ahmad Almaaitah³, Dr. Ehab Mohammad Injadat⁴

¹Associate Professor, The World Islamic Science and Education University, College of Finance and Business, Department of Banking and Finance, Jordan

²PhD Accounting, Financial Manager, Barzan Technology Solution (DIG), Jordan

³Lecturer (Part-time), The World Islamic Science and Education University, College of Finance and Business, Department of Banking and Finance, Jordan

⁴Assistant Professor, The World Islamic Science and Education University, College of Finance and Business, Department of Banking and Finance, Jordan

Email: Abeer.abadi@wise.edu.jo

Email: Nedal.Khaled@wise.edu.jo

Keywords:

Keywords: Cash Reserve Ratio, Return on Assets, Return on Equity ,Jordanian Commercial Banks, Performance.

Abstract

The study investigates the link between the mandatory reserve ratio and bank profitability in Jordan, concluding that the statutory reserve ratio has an impact on bank profitability, rate of Return on Assets (ROA), and rate of Return on Equity (ROE) in Jordan. When looking at quantitative data, the multiple-regression test is utilized. Data was collected for 13 Jordanian banks for the last 11 years, from 2010 to 2020. The study found no link between Jordanian commercial bank performance (return on assets and rate of return on equity) and cash-required reserve. This analysis reveals that other central bank measures have a greater impact on bank commercial cash reserves than the cash reserve ratio.

THE EFFECT OF THE CASH RESERVE RATIO ON THE PERFORMANCE OF JORDANIAN BANKS