Commercial and social activities of Indonesian Islamic banks: do they relate?

Purpose — This study investigates the relationship between commercial and social activities in Indonesian Islamic banks.Method employed a Panel Vector Error Correction Model (PVAR) model with Impulse Response Function (I.R.F), Variance Decomposition (V.D.C), Granger Causality. Observations were conducted from 2010 to 2020 on eight banks Indonesia, representing 72.72 percent of total banking population Indonesia. The collecting data pertains yearly financial report. Social are based amount zakat fund distribution (ZKT) benevolence (DKB). Commercial ratios that proxied by Return Assets (ROA), Financing Deposit Ratio (FDR), Non-Performing (NPF).Result results showed influenced their activities, but it does not apply vice versa. In other words, there is one-way banks.Contribution contributes studying using PVAR analysis Causality which so far have been explored.