Risk Managing Technique in Pakistan Industry: A Case from Pakistan

Abstract

This study examines the risk management solutions used in the banking sector to meet the many risks. The report also evaluates how conventional and Islamic banks in Pakistan manage risk. This study used primary sources. First, senior managers, risk managers, and chief risk officers from Islamic and normal banks fill out a questionnaire. 51 financial institutions responded. Data analysis uses descriptive statistics, cross-tabulations, t-tests, an ANOVA, and the LSD test. Regular banks' operational risk management strategies and stress test results differ from Islamic banks statistically. The study found no statistically significant difference between Islamic and conventional banks in how well they used risk management tools and systems, how much market risk VaR they used, how much credit risk exposure they had, how they reduced that risk, and how they analyzed their credit risk portfolios.