Does Islamic Banking Augment Banking Sector Development in Pakistan?

The authors point out that the local market crisis - on the USA substandard loan market - has led to the uncertainty of the world financial market. It has caused the growing demand for liquidity in the framework of the world financial system. The Russian banking sector seems to be more stable under negative changes than banking systems of other emerging markets. At the same time one can assume that the crisis will become the factor of qualitative shift in the character of the Russian banking sector development - the shift from impetuous to more balanced growth.

Download Full-text

Banking Sector Development, Inflation and Economic Growth in Asian Countries: A Panel Causality and Co-Integration Approach

International Journal of Accounting and Financial Reporting ◽

10.5296/ijafr.v8i4.14046 ◽

2018 ◽

Vol 8 (4) ◽

pp. 384

Author(s):

Muhammad Imran Nazir ◽

Rehana Tabassam ◽

Ifran Khan ◽

Muhammad Rizwan Nazir

Keyword(s):

Economic Growth ◽

Banking Sector ◽

Vital Role ◽

Least Square ◽

Policy Implications ◽

Asian Countries ◽

Ordinary Least Square ◽

Long Run ◽

Banking Sector Development ◽

Integration Test

This study investigates the causal relationship between banking sector development, inflation, and economic growth for six Asian countries (Bangladesh, China, India, Malaysia, Pakistan and Sri Lanka) over the period of 1970-2016. Using a Pedroni panel, Kao co-integration test, Panel Granger causality-based Error Correction Model, Dynamic ordinary least square (DOLS), and Fully modified ordinary least square (FMOLS), this study finds that the development of the banking sector generally has a positive relationship with economic growth in the long-run. This results show that in the long-run, monetary policy play a vital role in the economic growth. This study also confirmed the response causality between the indicators of banking sector development and economic growth. Based on the empirical findings, this research provides important policy implications to the banking sector and economic supervisory bodies in order to achieve the long run economic growth.

Download Full-text

Analysis of The Influence of Liquidity, Credit and Operational Risk, in Indonesian Islamic Bank’s Financing for The Period 2007-2013

Gadjah Mada International Journal of Business ◽

10.22146/gamaijb.8402 ◽

2015 ◽

Vol 17 (3) ◽

pp. 279 ◽

Cited By ~ 1

Author(s):

Ousmane Diallo ◽

Tettet Fitrijanti ◽

Nanny Dewi Tanzil

Keyword(s):

Credit Risk ◽

Causal Relationship ◽

Risk Sharing ◽

Banking Sector ◽

Panel Data Analysis ◽

Banking System ◽

Liquidity Risk ◽

Operational Risk ◽

Islamic Banking ◽

Islamic Bank

The purpose of this paper is to analyze the influence of credit, liquidity and operational risks in six Indonesian’s islamic banking financing products namely mudharabah, musyarakah, murabahah, istishna, ijarah and qardh, in order to try to discover whether or not Indonesian islamic banking is based on the “risk-sharing” system. This paper relies on a fixed effect model test based on the panel data analysis method, focusing on the period from 2007 to 2013. The research is an exploratory and descriptive study of all the Indonesian islamic banks that were operating in 2013. The results of this study show that the Islamic banking system in Indonesia truly has banking products based on “risk-sharing.” We found out that credit, operational and liquidity risks as a whole, have significant influence on mudarabah, musyarakah, murabahah, istishna, ijarah and qardh based financing. There is a correlation between the credit risk and mudarabah based financing, and no causal relationship between the credit risk and musharaka, murabahah, ijarah, istishna and qardh based financing. There is also correlation between the operational risk and mudarabah and murabahah based financing, and no causal relationship between the operational risk and musharaka, istishna, ijarah and qardh based financing. There is correlation between the liquidity risk and istishna based financing, and no causal relationship between the liquidity risk and musharaka, mudarabah, murabahah, ijarah and qardh based financing. A major implication of this study is the fact that there is no causal relationship between the credit risk and musharakah based financing, which is the mode of financing where the islamic bank shares the risk with its clients, but there is an influence of credit risk toward mudarabah mode financing, a financing mode where the Islamic bank bears all the risk. These findings can lead us to conclude that the Indonesian Islamic banking sector is based on the “risk sharing” system.

Download Full-text

Banking sector development and foreign direct investment. A case of Botswana

Risk Governance and Control Financial Markets & Institutions ◽

10.22495/rgcv4i3art5 ◽

2014 ◽

Vol 4 (3) ◽

pp. 44-50

Author(s):

Kunofiwa Tsaurai

Keyword(s):

Host Country ◽

Banking Sector ◽

Fdi Inflows ◽

The Third ◽

Long Run ◽

Banking Sector Development ◽

The Subject ◽

Causality Relationship ◽

The Moment ◽

The Relationship

The study investigates if there is a causality relationship between banking sector development and FDI inflows in Botswana. Though quite a number of authors have written on the subject, there appears to be no consensus on the directional causality between banking sector development and FDI inflows into the host country. At the moment, three dominant perspectives exist regarding the relationship between banking sector development and FDI inflows into the host country. The first perspective says that banking sector development attracts FDI inflows into the host country. The second perspective suggests that there is a positive feedback effect between banking sector development and FDI inflows whilst the third perspective maintains that there is no direct causality relationship between the two variables. The results from this study are consistent with the third perspective that says there is no direct causality relationship between banking sector development and FDI net inflows. This confirms that the long run relationship between banking sector development and FDI net inflows is an indirect one and the two set of variables affect each other indirectly through other factors in Botswana.

Download Full-text

Causes and solutions for the stagnation of Islamic banking in Turkey

ISRA International Journal of Islamic Finance ◽

10.1108/ijif-07-2017-005 ◽

2017 ◽

Vol 9 (1) ◽

pp. 43-61 ◽

Cited By ~ 6

Author(s):

Halit Yanīkkaya ◽

Yaşar Uğur Pabuçcu

Keyword(s):

Business Models ◽

Banking Sector ◽

Growth Strategy ◽

Islamic Banking ◽

Technology Infrastructure ◽

Content Type ◽

Governance Framework ◽

Information Technology Infrastructure ◽

Institutional Differences ◽

Conventional Banks

Purpose This paper aims to evaluate the root causes of stagnation of the Islamic banking sector in Turkey in three steps and proposes solutions and policy recommendations. Design/methodology/approach First, global Islamic banking practices in terms of governance and instruments are summarised and compared with the Turkish experience. Second, the financial and efficiency ratios of Turkish Islamic banks (IBs) and conventional banks (CBs) are compared and analysed for the period 2005 to 2015. Finally, the long-term growth strategy of Turkish IBs is evaluated. Findings This paper asserts that Islamic banking in Turkey diverges from Islamic banking practices of prominent countries by not having a Sharīʿah governance framework at either a national or bank level. Turkey is thus immediately in need of a sound Sharīʿah governance framework. Increasing the variety of instruments and improving the perception of Islamic banking in the society are other critical points. Furthermore, regulatory and research institutions specifically focusing on Islamic banking are insufficient. A large number of financial and efficiency ratios reveal that the efficiency and profitability of IBs fall behind that of CBs. IBs should improve their business models, operational efficiencies and information technology infrastructure as these issues are undervalued in their growth strategy. Originality/value This study sheds light on the Turkish Islamic banking sector, which is a rarely studied topic. It is the first study that provides institutional differences of banking practices and evaluates the efficiency status and growth strategy of IBs in Turkey.

Download Full-text

Islamic Financial Inclusion

Growth and Emerging Prospects of International Islamic Banking - Advances in Finance, Accounting, and Economics ◽

10.4018/978-1-7998-1611-9.ch009 ◽

2020 ◽

pp. 155-173

Author(s):

S. M. Sohrab Uddin ◽

Mohammad Zoynul Abedin ◽

Nahid Afroz

Keyword(s):

Banking Sector ◽

Financial Inclusion ◽

Islamic Finance ◽

Islamic Banking ◽

Policy Makers ◽

Muslim Population ◽

Muslim Countries ◽

The World ◽

Global Concern ◽

Empirical Contribution

Financial Inclusion (FI), a global concern of this decade, has been accepted by development agencies, governments, and policymakers as one of the pre-eminent ways to eradicate worldwide poverty and income inequality. Consequently, authorities are looking for possible ways to include the unbanked in formal financial chain. Islamic finance, specifically Islamic banking, with its welfare-oriented principles and unique products, has been able to capture the attention of policy makers. Moreover, a major portion of the Muslim population still exclude themselves from the formal financial chain due to religious prohibition of interest-based transactions for whom Islamic finance is the only way to inclusion. Bangladesh, one of the major Muslim countries in the world, is still to bring one-fourth of its total population under formal financial chain. At this backdrop, this chapter examines the empirical contribution of Islamic banking sector in financial inclusion condition as well as development scenario of Bangladesh.

Download Full-text

The Good and Bad News about the New Liquidity Rules of Basel III in Islamic Banking of Malaysia

Journal of Risk and Financial Management ◽

10.3390/jrfm12030120 ◽

2019 ◽

Vol 12 (3) ◽

pp. 120

Author(s):

Shazleena Mohamed Zainudin ◽

Siti Zaleha Abdul Rasid ◽

Rosmini Omar ◽

Rohail Hassan

Keyword(s):

Banking Sector ◽

Secondary Data ◽

Islamic Banking ◽

Present System ◽

Basel Iii ◽

Policy Makers ◽

Coverage Ratio ◽

New Horizons ◽

Regulatory Guidelines ◽

Unique Framework

How has Basel III (Bank for International Settlements), regarding the computation, measurement, and management of the liquidity coverage ratio (LCR), vitalized the Islamic banking sector in emerging economies? Vice versa, what is the Islamic banking sector’s capacity to respond in embracing Basel III? This study aims to review the current issues faced by a bank as it discusses the current regulatory guidelines and operational challenges in implementing the system. Based on the implementation of LCR preliminary secondary data of Malaysian banks between 2010 and 2016, this study finds that the readiness of LCR system implementation in the Islamic banking industry is currently low because LCR is still relatively new for all financial institutions and vendors. There is a huge gap between the present system infrastructure of the banks and the LCR model requirements as defined by BNM (Bank Negara Malaysia) under Basel III. Nevertheless, this finding opens new horizons of understanding and practically offers further investigations for the whole banking sector in Malaysia. Thus, policy makers, regulators, and industry players should utilize a unique framework for Islamic banks when strategizing liquidity risk management.

Download Full-text

The Effect of Brand Experience on Customers’ Engagement Behavior within the Context of Online Brand Communities: The Impact on Intention to Forward Online Company-generated Content

Sustainability ◽

10.3390/su11174649 ◽

2019 ◽

Vol 11 (17) ◽

pp. 4649 ◽

Cited By ~ 3

Author(s):

Yasin ◽

Porcu ◽

Liébana-Cabanillas

Keyword(s):

Online Survey ◽

Banking Sector ◽

Islamic Banking ◽

Brand Experience ◽

Banking Services ◽

Brand Communities ◽

Online Branding ◽

Online Brand Communities ◽

The Impact

The purpose of this study is to assess the antecedent role of brand experience (BE) in the intention to forward online company-generated content (CGC) within an online Islamic banking sector. The present study analyzed 387 valid responses collected through an online survey conducted among a number of online Islamic bank customers in Palestine. The results of this study revealed that BE has a stronger influence on customers’ intention to forward online company-generated contents. This research pioneers the empirical research in Palestinian Islamic banking systems exploring the instrumental role of BE on customers’ engagement behaviors, as well as the intention to forward online CGC. In addition, this research aims to fill the existing gap in the under-researched area of the online branding of Islamic banking services.

Download Full-text