Bridging Risk, Regulation, and Behavior: Understanding Credit Tolerance Behavior in ‎Crisis-Era Banking

  • Authors

    • Sunitha Devi Department of Doctoral Program of Accounting Science, University of Udayana, Denpasar, Indonesia
    • I Ketut Yadnyana Department of Doctoral Program of Accounting Science, University of Udayana, Denpasar, Indonesia
    • Anak Agung Gde Putu Widanaputra Department of Doctoral Program of Accounting Science, University of Udayana, Denpasar, Indonesia
    • Ni Made Dwi Ratnadi Department of Doctoral Program of Accounting Science, University of Udayana, Denpasar, Indonesia
    https://doi.org/10.14419/e6vasf86

    Received date: May 26, 2025

    Accepted date: June 9, 2025

    Published date: June 20, 2025

  • Tolerance Behavior; Credit Restructuring; Banking, Economic Crisis; COVID-19‎.

  • Abstract

    The COVID-19 pandemic posed unprecedented challenges to the banking sector in Bali, exposing critical gaps between regulatory inten-‎tions and actual credit restructuring practices. This study examines the innovative concept of credit restructuring tolerance behavior (CRTB), ‎which provides a behavioral framework for comprehending account officers' (AOs) discretion in credit restructuring decision-making amid ‎crises, encompassing both psychological tendencies and organizational limitations. This study, grounded in an integrative framework of ‎social cognitive theory and the theory of planned behavior, investigates the influence of risk management knowledge, self-efficacy, herding ‎behavior, standard operating procedures (SOPs), and regulations on CRTB, while examining how gender and organizational culture affect ‎decision-making flexibility. To this end, a quantitative survey involving 290 AOs from 168 banks in Bali was conducted. Data were analyzed using structural equation modeling with a second-order embedded two-stage approach, supported by Mann–Whitney U tests for ‎group comparisons and robustness checks. The findings indicate that risk management knowledge and self-efficacy positively influence ‎CRTB, whereas herding behavior and rigid SOPs have a negative effect. Meanwhile, gender and cultural dimensions have significantly ‎different impacts, with women and employees in pragmatic cultures demonstrating greater adaptive capacity. These results underscore the ‎critical interplay between internal capacities and external structures. Enhancing employee knowledge, building employee confidence, and ‎revising SOPs to allow situational discretion can substantially improve the resilience of the banking sector. Based on the findings, policy-makers are encouraged to adopt non-coercive, flexible regulatory frameworks that empower front-line employees to respond effectively ‎during economic disruptions.

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    Devi, S., Yadnyana, I. K., Widanaputra, A. A. G. P. ., & Ratnadi, N. M. D. (2025). Bridging Risk, Regulation, and Behavior: Understanding Credit Tolerance Behavior in ‎Crisis-Era Banking. International Journal of Accounting and Economics Studies, 12(2), 163-175. https://doi.org/10.14419/e6vasf86