Banking Sector Of Bangladesh Research Articles

Exploring the Role of Bank-Specific Factors in Nonperforming Loans: A Study of Islamic Banks in Bangladesh

Nonperforming loans (NPLs) have posed a significant challenge to the banking sector in Bangladesh for decades, particularly within Islamic banks, where little research has been conducted to assess the relationship between agency costs and nonperforming loans. This study explores the role of agency costs and other bank-specific factors in determining nonperforming loans (NPLs) in Islamic banks in Bangladesh. This study employs pooled ordinary least squares (OLS) regression with panel data from Q1 2013-14 to Q4 2023-24 to analyze the relationship between the cost-to-income ratio (as a proxy for agency costs), return on assets (ROA), loan-to-deposit ratio (LDR), capital adequacy ratio (CAR), and NPL ratios. The study confirms that agency costs play a central role in influencing NPLs, alongside other bank-specific factors such as profitability, capital adequacy, and lending practices. The results indicate that a high level of operational inefficiency significantly influences NPLs, whereas ROA and CAR act as mitigating factors for credit risk. Conversely, aggressive lending practices, as indicated by an increased LDR, are associated with higher NPLs. Islamic banks face significant institutional flaws, and agency costs reflect deeper governance issues that cannot be ignored. The study further argues for the need to improve governance, operational efficiency, and prudent lending practices within Islamic banks.

Family Support–A Critical Factor to Reduce Work Stress and Facilitate Work Life Balance for Female Employees of Banking Sectors in Bangladesh

Due to economic circumstances and social demands the role of working women has changed in developing countries, like Bangladesh. For this reason, women have tremendous pressure to develop a career as strong as their male counterparts while sustaining active participation in personal life. The ever-increasing pressure in the workplace makes it completely difficult for women to get quality time for their family. This creates negative impact on women’s physical, emotional and social well-being. Thus, attaining work life balance is essential for working women to have a good quality of professional and personal life. This study attempts to explore the role of family support to balance the work life and reduce the job stress for female employees in Bangladesh. The study also focuses on the impact of family support to maintain work life balance and reduce job stress. The finding of the study reveals that family support is the most important issue for working women to continue a healthy professional as well as personal life especially in case of married women. It is also visible that family support has an opposite relationship with job stress.

INFLUENCE OF TECHNOSTRESS, MENTORSHIP ON TURNOVER INTENTIONS: EXPLORING THE ROLES OF JOB SATISFACTION IN BANGLADESH’S PRIVATE BANKING SECTOR EMPLOYEES

The banking sector is a prime driver in the economy of Bangladesh, where private commercial banks are the key players. Recently, Bangladesh private banking sector facing the problem of a high rate of employee turnover intention. Therefore, the purpose of the study to investigate the influence of technostress, mentorship on turnover intention with the mediating effect of job satisfaction to mitigate turnover intention among Bangladesh private bank employees. Previous research has been conducted on bank performance, profitability, and sustainability, but few studies have focused on employees' intention to leave. Technology-related factors that affect employee turnover intention are still a new concept in Bangladesh. Most of the research so far has been conducted in a Western context. The extensive review of literature on the factors affecting employee turnover in the banking sector of Bangladesh does not provide any conclusive evidence on the issue. The findings of these variables are inconclusive, necessitating further research. The relationship between mentorship and technostress turnover intention has yet to be thoroughly examined in the emerging Asian context, especially in Bangladesh. In addition, previous studies have overlooked the mediating effect of job satisfaction in the relationship between technostress and turnover intention. Social exchange theory and Job demand and resource (JD-R) theory support the proposed research framework.

EFFECTS OF GREEN FINANCE ON NON PERFORMING LOAN OF BANKS: EVIDENCE FROM BANGLADESH

The banking sector in Bangladesh has been suffering from a high level of non-performing loans (NPLs). In recent years, incorporating green finance (GF) practices within banking institutions has received considerable attention as a potential solution to improve their loan performance. However, despite the extension of GF practices, there have been very few studies on the impact of GF on NPL and the relationship between GF and NPL in Bangladesh. This study, therefore, seeks to examine the effects of bank’s green finance schemes on their loan performance. This quantitative study employs the panel data of the banks from 2015 to 2023 and focuses on variables related to GF and NPL to serve this objective. Data validity was justified using the unit roots and collinearity tests, such as variance influence factor and tolerance level. Accordingly, this study employs the panel least square (PLS), panel ordinary least square (POLS) and fixed effect model (FEM), and quantile regression to examine the impact between these sets of variables. The correlation between GF schemes and NPL has been determined. The study reveals that GF has significant effects on NPL since p values for the significant green finance variables are less than 0.10 (P ≤.10) at the 0.10 level, less than 0.05 (p≤0.05) at the 0 .05 level and less than 0.01 (p≤0.01) at the 0.01 level. The results of this study suggest that taking the GF scheme into the banking investment would reduce NPLs and help design the policymaking of the government, banks, and other stakeholders.

The Possibility of Financial Distress and Its Determinants: Evidence from the Banking Sector of Bangladesh

The banking sector of Bangladesh has shown poor performance for over a decade now. The non-performing loans increased over the years. This prompts the question of whether the banks are capable of maintaining financial stability and continue as a going concern. This is further fueled by the number of financial scandals which took place over the years, such as the Hallmark scandal, irregularities in Islami Bank Bangladesh Ltd., BASIC Bank Limited etc. that further highlights the signs of possible financial distress. These incidents call for an investigation of bank-specific determinants that might have a significant effect in leading a bank towards bankruptcy. This study has used the data of 30 listed commercial banks in Bangladesh, from the year 2014 to 2020. The bankruptcy risk is measured using the Altman Z-score, which has been extensively used as a suitable bankruptcy risk measurement tool. Statistical analysis has been conducted, using random-effects regression model and correlation, to test the relationship and impact of bank-specific factors. Capital adequacy ratio has shown significantly positive impact on the bankruptcy risk, while age has shown significantly negative impact on bankruptcy risk. Non-performing loan has also shown negative relationship with Z-score, which is contrary to the conventional belief.

A Study of Financial Crimes in the Banking Sector of Bangladesh

In recent years, Bangladesh has witnessed significant financial crimes within the banking sector, which pose a serious concern for the country. This research investigates the nature and contributing factors of financial crime in the banking sector, along with its primary causes and consequences. The study adopts a qualitative and descriptive approach to examine the modus operandi and impacts of such crimes. Secondary data have been collected from relevant literature, annual reports of Bangladesh Bank, and reviews of pertinent laws and legal cases. Additionally, this study explores various legal measures that can be implemented to curb financial crime in the banking sector. It also highlights the most critical actions that could be taken to prevent these crimes. The aim is for readers to gain a deeper understanding of financial crime and the mechanisms by which law enforcement addresses such offenses. The researcher has analyzed the nature, causes, effects, and potential preventive measures regarding financial crime in Bangladesh's banking sector.

Analyzing the Impact of Industry-Specific Loan Disbursement on Profitability in the Banking Sector of Bangladesh

Analyzing the Impact of Industry-Specific Loan Disbursement on Profitability in the Banking Sector of Bangladesh

Forensic accounting as a tool for fraud detection and prevention in the banking sector of Bangladesh

Forensic accounting as a tool for fraud detection and prevention in the banking sector of Bangladesh

Scope of Implication of Forensic accounting and Fraud Investigation in an emerging economy: An empirical study on the banking sector of Bangladesh

Scope of Implication of Forensic accounting and Fraud Investigation in an emerging economy: An empirical study on the banking sector of Bangladesh

Effectiveness of internal auditing from the lens of internal audit factors: empirical findings from the banking sector of Bangladesh

PurposeThis study aims to assess the impact of determinants on the effectiveness of internal audit (IA) within the banking industry of Bangladesh.Design/methodology/approachThe data was obtained through 152 survey questionnaires from a total of 43 privately owned and six state-owned commercial banks in Bangladesh. The analysis was conducted using structural equation modeling.FindingsThe findings demonstrate that the independence of internal auditors and the quality of IA substantially impact enhancing the efficiency of IA. On the other hand, the competence of internal auditors and management support in IA functions do not significantly impact the effectiveness of IA.Practical implicationsThe study’s findings may have significant policy implications for the government, regulators, internal auditors, management committees and other stakeholders in establishing programmes to enhance the efficacy of IA as a component of banking audit management reforms.Originality/valueThis study makes three distinct contributions to the existing literature. Firstly, previous literature focused on the determinants affecting the external audit efficiency of the public companies and banking sectors in Bangladesh (Hasan, 2018; M. M. U. Reza, 2021). In this study, the author enhances the research by presenting empirical findings on the IA effectiveness of banks. Secondly, the author expands the research by incorporating both private and state-owned commercial banks as samples. Thirdly, the study is unique given that it investigates the effectiveness of IA in response to the recent financial scandals in the banking industry of Bangladesh (The Daily Star, 2023).

Liquidity Risk Management and Bailout Strategies of Bangladeshi Commercial Banks

Purpose: The aim of this study is to evaluate the bailout strategies for sound liquidity management of Bangladeshi Nationalized Commercial Banks. Method: The researcher has selected six banks purposively as sample. A survey was conducted to gather opinions from 120 officials working in the treasury departments of these selected banks. The survey utilized a questionnaire and employed a direct approach. Subsequently, the collected data underwent analysis using common size statement analysis methodology. The survey encompassed various regulatory decisions pertaining to liquidity management. Result and conclusion: The results indicate that within the scope of 07 distinct Acts, Laws, and Regulations, there exist 19 prescribed rules and limits. Among these, 07 rules adhere to the established standards, while 03 exceed the prescribed rules and limits, and 09 fall short of meeting the specified limits. Implication of the research: The evaluation of bailout strategies offers valuable insights into enhancing liquidity management practices, potentially bolstering the stability of the banking sector. Besides, the identification of discrepancies between regulatory requirements and actual compliance underscores the need for stringent oversight and enforcement mechanisms. Lastly, by highlighting areas of non-compliance, the researcher recommends that Bangladesh Bank must critically review and monitor the rules regularly. Originality: The originality of this research lies in its pioneering exploration of bailout strategies, offering novel insights into the regulatory landscape and practical implications for effective liquidity risk mitigation and financial stability in Bangladesh's banking sector.

Analyzing the Effects of Macroeconomic Factors on the Financial Performance of Bangladeshi Commercial Banks

Since banks mobilize financial resources across the economy, they are expected to be critical in bringing about financial stability and economic progress. The purpose of this research was to determine the impact of macroeconomic variables on the financial performance of commercial banks in Bangladesh. From the World Bank website, secondary data were gathered for the fiscal years 2010 through 2021. Correlation, multiple linear regression, factor analysis, and model selection criteria were utilized for this study. From the correlation analysis, it was observed that the inflation rate was significantly and positively correlated with the financial performance of commercial banks in Bangladesh. From the multiple linear regression analysis, it was seen that import, exchange rate, and inflation rates have a substantial impact on Bangladesh's commercial banks' financial performance. From the factor analysis, it was observed that GDP and imports are highly correlated with Bangladesh's commercial banks' financial performance. Based on the model selection criteria, it was discovered that the model including all variables is the best. The government, other researchers, bank managers, possible investors, financial experts, and anybody else involved in Bangladesh's banking sector should all take note of the findings.

Corporate Governance Disclosure in the Banking Sector of Bangladesh: Evidence from the Conventional Private Commercial Banks

Corporate governance is necessary for any organization to be accountable and responsible. This study looked into the relationship between CG mechanisms and CG disclosure levels using five listed conventional PCBs as a sample over a five-year period spanning 2016 to 2020. An unweighted disclosure checklist was utilized in this study to measure CG disclosure levels. To determine whether there is any significant relationship between the level of CG disclosure and CG mechanisms, multiple regression analysis has been done. Based on the empirical results, it can be concluded that there is a significant and insignificant association between CG mechanisms and the CG disclosure levels, but there is only a visible and significant difference in these areas between the sample banks. The results of the multiple regression analysis indicate that the log percentage of female directors does not significantly relate to the levels of CG disclosure. On the other hand, the extent of CG disclosure is significantly associated with other variables, including board members, percentage of audit committee members, and percentage of independent directors, log total assets, log total revenues, and log listing age.

Examining Volatility in Bank Stock Prices: A Comparative Exploration of Dividend Policies, Macroeconomic Influences, and Company-Specific Factors

This study aims to ascertain and compare factors influencing stock price volatility in terms of dividend policy, macroeconomic and company specific aspects for selected subset of listed banks in Bangladesh. Eleven years of secondary data (from 2011 to 2021) for fifteen commercial banks (representing 61.5% market capitalization of the banking sector) was acquired from diverse sources. The dependent variable chosen is stock price volatility, whereas the dividend policy is initially represented by dividend payout ratio (PRt & PRt-1), dividend yield (DYt & DYt-1). Several firm and country-specific macroeconomic indicators are used as control variables. A methodical approach followed by panel data analysis has been employed to identify a suitable model that can yield more accurate estimators. Consequently, some diagnostic tests are also performed to account for diagnosed problems: contemporaneous cross-sectional correlation, group-wise heteroskedasticity and autocorrelation; Driscoll-Kraay standard error regression model is finally applied. The study not only found significant negative impact of dividend payout ratio but also spotted a significant influence of inflation, EPS, and firm size on stock price volatility. Price volatility influenced by “No dividend policy” can be reinvestigated from the aspect of behavioral finance in the future. Furthermore, this study also sheds light on to what extent firm-specific and macroeconomic influence impact stock price volatility in Bangladesh's banking sector.

INVESTIGATING THE IMPACT OF COMPENSATION AND BENEFITS ON EMPLOYEE JOB SATISFACTION: A QUANTITATIVE STUDY OF THE BANKING SECTOR IN BANGLADESH

The quantitative study aimed to explore the impact of compensation, benefits, and work environment on employee job satisfaction within the Banking Sector in Bangladesh. Through rigorous analysis of survey responses from employees, key insights were garnered, providing a comprehensive understanding of factors influencing employee satisfaction. The findings highlighted the paramount importance of fair and competitive compensation structures in influencing employee perceptions. Employees valued compensation that was perceived as equitable and reflective of their efforts. Non-monetary benefits, such as health insurance and professional development opportunities, were also significant contributors to overall job satisfaction. Moreover, the study revealed the substantial influence of the work environment on employee perceptions. A positive work culture, characterized by supportive interpersonal relationships and adequate resources, emerged as a critical factor impacting employee satisfaction and well-being. Despite positive perceptions, areas for improvement were identified. Strategies to enhance performance-based incentives, clarify career advancement pathways, and emphasize the value of non-monetary benefits were recommended to improve overall employee satisfaction. Continuous engagement and adaptive strategies were underscored as pivotal for sustained employee satisfaction. Establishing regular feedback mechanisms and implementing responsive strategies were highlighted as essential for addressing evolving employee needs effectively. The implications for the Banking Sector in Bangladesh are significant. By implementing recommended strategies, banks can cultivate an environment that nurtures employee engagement and satisfaction, subsequently enhancing organizational performance and competitiveness within the sector. In conclusion, the study provided comprehensive insights into the multifaceted dynamics shaping employee job satisfaction. Leveraging these findings and implementing the proposed strategies can empower banks to create an environment that fosters employee contentment, engagement, and overall well-being, contributing to the sector’s success and growth.

Forward Looking Disclosure and Its Determinants: Empirical Evidence from the Listed Banks of Bangladesh

Forward looking information is an emerging issue in academic and corporate arena. Today’s dynamic and competitive business world, the disclosure of forward looking information gives competitive advantages. The main objective of the study is to empirically find out the extent of forward looking disclosure and it’s determinants in the banking sector of Bangladesh. To conduct the study total 120 firm years are considered as sample from 30 listed banks from DSE as sample during the period 2017 to 2021. The average mean value of forward looking information is 38% which indicates poor quality of forward looking information in the most regulated sectors of Bangladesh. The results using multivariate regression analysis shows that board independence, audit firm size and firm’s profitability have positive and significant relationship with forward looking disclosure index (FLDI). This study also finds that foreign ownership, board size and audit independence have significant negative relationship with FLDI. But this study didn’t find any significant association of forward looking information with firm size, female board members, sponsor /directors in the banking sector of Bangladesh. To the best of our knowledge, there is scarcity of research that has been examined the disclosure of forward looking information and it’s determinants in banking sector of Bangladesh as well as very limited work is done in other sectors. The study will contribute to the existing scarce literature and may influence the policymakers and regulators to incorporate regulations to increase the quality and extent of forward looking disclosure.

Barriers to AI Integration in Banks in Bangladesh

This study examines the challenges of integrating artificial intelligence (AI) in Bangladesh's banking sector, with a focus on identifying the obstacles hindering AI adoption. Employing a mixed-methods approach, this research incorporates quantitative surveys and qualitative interviews with banking professionals. Key findings reveal significant barriers, including a lack of technical expertise, high implementation costs, regulatory challenges, and resistance to change among employees and management. Cultural factors and limited awareness of AI’s potential benefits exacerbate these challenges. Additionally, data privacy and security concerns contribute to reluctance in adopting AI technologies. The study concludes that addressing these barriers through strategies such as enhanced training programs, regulatory reforms, public-private partnerships, and comprehensive change management initiatives could significantly enhance AI integration in the banking sector of Bangladesh. These strategies would not only improve operational efficiency but also lead to better customer satisfaction and competitive advantage. By fostering a supportive regulatory environment and encouraging innovation, banks in Bangladesh can leverage AI to meet evolving market demands. Developing a robust infrastructure to support AI technologies and promoting a culture of unceasing learning and adaptation are essential steps towards successful AI integration. Future research should explore the long-term impact of AI integration on banking sector performance and customer experience, providing deeper insights into the evolving landscape of financial technology in developing economies. Understanding and mitigating these barriers is crucial for successful AI implementation, ensuring that Bangladesh's banking sector can fully realize the benefits of this transformative technology.

Job Stress Factors and their Impact on Employee Performance: A Study of the Banking Sector in Bangladesh’s Southern Area

This study has endeavored to pinpoint the origins of occupational stress, scrutinizing the nexus between three distinct dimensions and job stress, as well as the correlation between job stress and task performance. Following a succinct review of extant literature on the subject matter, the subsequent section of this inquiry has delineated its theoretical framework and proposed hypotheses. Analysis of variance (ANOVA), Pearson correlation analysis, and linear regression have been enlisted to ascertain associations, while descriptive statistics have been leveraged for data elucidation. The Pearson correlation coefficients have exhibited a statistically significant relationship (p < .01) between all three factors under examination and job stress, suggesting a collective impact on the overall level of occupational stress. This implies that the cumulative effect of these factors has contributed to an escalation in job stress. Moreover, with a significance level below .01 and a Pearson correlation coefficient indicating a strongly negative relationship, a detrimental association between job stress and task performance has been evident. This implies that as job stress has increased, manual performance has diminished. Thus, all factors contributing to occupational stress have exerted a deleterious influence on task performance. The empirical insights gleaned from this study hold practical implications for managerial decision-making within financial institutions and other organizational settings.

Green HRM Practices and Employees’ in Role Behavior: Mediating Effect of Organizational Citizenship Behavior towards the Environment in the Banking Sector of Bangladesh

Academics are placing emphasis on the need for personnel in the banking sector to undergo behavioral transformation due to the sector’s subpar and inefficient environmental performance. This study examines how green human resource management (GHRM) practices like green recruitment & selection, green training & development, green performance management, and green pay & rewards affect employees in role behavior in Bangladeshi banks. It also examines how workers’ organizational citizenship behavior towards the environment (OCBE) mediates green HRM practices & employees in role behavior. Data from several private and public banks in Bangladesh was gathered between January to June 2024. Data was collected from bank employees in metropolitan cities of Bangladesh utilizing a semi-structured questionnaire and a quantitative study approach. The participants were selected by a non-probability sampling method known as Convenience sampling. Nevertheless, a total of 288 surveys were duly completed and returned. Structural equation modeling, utilizing Smart-PLS second-generation software, revealed the results. This study found four independent variables and one dependent variable. Additionally, it is shown that OCBE acts as a mediator. The study revealed that five of the components exhibited a direct and significant correlation with the independent variables. In contrast, the remaining four factors have a negative correlation with the independent variables. Green HRM procedures in Bangladesh’s banking business are considered adequate but not very satisfactory. These workers also exhibit OCBE and in-role behavior. This study also found positive and negative effects of green HRM strategies on OCBE. The findings also indicated that although most of the banks have established green targets and goals, incorporated environmental concerns into job descriptions and specifications, implemented comprehensive environmental training programs, provided opportunities for green suggestion schemes, and conducted effective workshops to enhance environmental behavior, their actual implementation is insufficient. Moreover, the outcomes of this study have been scrutinized in relation to previous study results. Ultimately, this study provided guidance for future researchers to extrapolate the findings to a broader context.

Customer Trust and Satisfaction: Insights from Mobile Banking Sector in Bangladesh

The major objective of this study was to assess the level of customer satisfaction, with a specific focus on mediating role of trust on customer satisfaction. The study obtained its findings through the application of a structured equation model (SEM) using Amos version 24, based on the responses provided by a sample of 384 users of mobile banking. The research conducted revealed that there is a notable and affirmative correlation between System Quality, Information Quality, and Service Quality, and the level of trust. Trust is a mediating factor that exerts positive and significant effects on customer satisfaction. The independent variable exerts an indirect influence on customer satisfaction by means of trust. Mobile banking system has the potential to significantly contribute to the provision of financial services to individuals who lack access to traditional banking or have limited access, hence promoting financial inclusion and mitigating economic inequalities. Further research could be conducted in the same field by incorporating various mediating variables such as age, gender, occupation, and educational qualification, among others.