Determinant of bank lending rates in Malaysia / Fazazainiza Nooh

The aim of this paper is to analyse the relationship between BLR and the possible determinant factors, namely; NPL, INFR and GDP, to look at which factor is has strongly significant relationship during period between 1998 until 2015 which is to examine the possible differences between BLR and the determinant factors among different types of banks (i.e. the local commercial bank, commercial bank, finance companies and merchant banks). Second objective is to understand the theoretical perspective of BLR determinants and to model and examine the theoretically and empirically identify determinant factors. To achieve the objectives of this study the regression analysis was carried out. The data used only in Malaysia. The study found that lending interest rates has positive relationship to NPL on local commercial bank in Malaysia, finance companies and merchant bank but negative relationship with commercial bank. For other variable study found that INFR has positive relationship to lending interest rates, but negative relationship to GDP. The study recommends to do innovation in the banks itself on their operation activities, besides to support the monetary authorities.