Banking Institutions Research Articles

Employees' Perception towards Pygmalion-Oriented Leaders and Leader-Member Exchange in Commercial Banks

Pygmalion-oriented leaders and Leaders Member Exchange (LMX) are the essential antecedents of employees' perception in an organisation, but they are less examined in prior research. Thus, this study examines the employees' view of Pygmalion-oriented leaders and LMX as it might pose a dyadic presentation. This study followed the positivist epistemology. A descriptive and causal research design has been used in this study. One hundred forty employees from commercial banks participated in this study. Responses were collected using a convenience sampling method. The study used correlation and regression to study the Pygmalion effect and LMX impact in shaping employees' perceptions. The findings of the study postulate that the Pygmalion-oriented leader and positive LMX have a significant impact on shaping the employees' perception. The findings of the study show that the Pygmalion effect and Leader Member Exchange has a considerable impact upon shaping the employees’ perception. This study's findings apply to the Nepalese context, specifically in the banking sector and the banking and financial institutions (BFIs) of Nepal. This study is imperative for accentuating the role of the Pygmalion effect and the essence of LMX in managing the BFIs and other big institutions of Nepal.

Re-intermediation of the crypto asset ecosystem by banks: An empirical study on acceptance drivers among the populace

After the initial surge in decentralized finance, widespread public adoption did not materialize. A predominant portion of the populace harbors distrust towards the crypto asset market. Conversely, banks, serving as intermediaries in financial management, enjoy heightened trust. The contemporary development within the banking sector indicates an inclination towards integrating into the crypto asset market. This integration results in new business models for banking institutions and emergent opportunities for their clientele. Prior research addresses perceptions surrounding cryptocurrencies. The present research augments this field by investigating the acceptance of crypto assets. Specifically, we conducted an empirical user study to analyze investing behaviors. By adapting the theoretical framework of the technology acceptance model to the unique characteristics of crypto assets, we highlight acceptance drivers. Notable variances in awareness of crypto assets affect investment decisions. The findings of this study contribute to social welfare by identifying impediments to sustainable investment practices. Additionally, these insights facilitate a more sophisticated comprehension of strategic alternatives available to banking institutions.

The role of loan loss provisions in income inequality: Evidence from a sample of banking institutions

This study explores the empirical link between income inequality and banks’ Loan Loss Provisions (LLPs) through a sample of banking institutions from 132 countries, applying a panel regression methodology. The evidence reveals that higher LLPs have a positive impact on income inequality, and the findings remain valid across various model specifications and income inequality measures. The results also hold against various robustness tests, such as different bank sizes, developed vs. emerging countries, the impact of the 2008 global financial crisis, and the controlling for risk. The implications are relevant for stakeholders, including regulators that endeavor to protect banking systems against expected and unexpected losses via LLPs. Specifically, since credit decisions have substantial effects on income inequality, regulators should mitigate the accumulation of LLPs, allowing more funds to be available for other banking system activities and functions.

From structural racism to systemic solutions: racial equity in Brazil's banking industry

The objective of this study is to identify and analyze strategies that can be implemented to promote racial inclusion in the Brazilian banking sector. This study proposes a systematized set of sectoral strategies to reduce racial inequality in the Brazilian banking sector, called "Systemic Strategies for Racial Equity." This integrated, industry-specific approach has not previously been listed in the literature, offering a new perspective on implementing diversity policies, not just at an organizational level, but considering the industry as a whole. The qualitative research uses the case study strategy, focusing specifically on the Brazilian banking sector. Data collection procedures include semi-structured interviews with representatives of banking institutions, regulatory entities, and justice bodies, in addition to the analysis of institutional documents and secondary data. Data analysis follows the methodology of Gioia, Corley, and Hamilton (2013), involving first—and second-order coding to identify emerging themes, culminating in the aggregation of these dimensions into a theoretical model. Three main sectoral strategies were identified: the Legal Compliance Strategy, the Social Pressure Strategy, and the Recognized Excellence Strategy, which form the set of "Systemic Strategies for Racial Equity." Notably, these are not individual business strategies but sectoral ones that must be implemented and led by government institutions, regulators, or society. This study offers a theoretical contribution by proposing a systematized set of sectoral strategies to reduce racial inequality in the Brazilian banking sector. Socially, the research encourages discussion about the need for greater racial equity, highlighting the importance of comprehensive policies beyond isolated company actions.

Syari’ah Banking and Financial Institutions in a Positive Legal Perspective

Syari’ah Banking and Financial Institutions in a Positive Legal Perspective

Digital banking: how social media is shaping the game

Purpose This paper aims to explore the transformative influence of social media applications on the digital evolution of banks. Using a multiple case study approach, this study investigates how Italian banks have adopted social media in their digital transformation. The study seeks to uncover strategies used by banks to maximise the benefits of social media platforms and assess the outcomes and challenges faced during this process. The results provide valuable insights for banks navigating digital transformation, emphasising the importance of organisational culture, client engagement, financial innovation and proactive response to fintech disruptions. Design/methodology/approach This study uses a multiple case study approach to investigate the influence of social media applications on the digital transformation of banks. Six Italian banks that integrated social media into their digital transformation efforts are analysed. The research examines the strategies used by these banks to effectively leverage social media platforms. The outcomes and implications of these initiatives are scrutinised to discern both positive impacts and challenges faced by banks and customers. The research methodology involves in-depth analysis of case studies, incorporating insights from managerial interviews to underscore key aspects essential for successful digital adaptation in the banking sector. Findings This study reveals profound impacts of digital transformation on the banking sector, emphasising key implementation areas. Insights gleaned from case studies of six Italian banks underscore the transformative influence of social media applications. Results highlight positive impacts, including enhanced customer service, engagement, financial literacy and community building. Managerial interviews underscore five critical aspects: the imperative for a new organisational culture, a focus on millennial clients, understanding and offering new financial instruments and proactive responses to challenges posed by emerging fintech companies. Successful adaptation necessitates attention to organisational culture, client engagement, financial innovation and proactive response to fintech disruptions. The findings contribute to the evolving understanding of the transformative role of social media in reshaping the banking industry. Originality/value This paper fills a critical research gap by delving into the challenges specific to banking institutions during the implementation of social media strategies amid digital transformation. While existing literature predominantly highlights positive impacts, this study pioneers a comprehensive exploration of unique hurdles faced by banks. The multiple case study approach, focusing on six Italian banks, contributes original insights into the strategies used to maximise social media benefits. The research provides a nuanced understanding of both positive impacts and challenges encountered, offering valuable guidance for refining social media approaches in the ever-evolving digital landscape. This contributes to the existing body of knowledge and aids banks in navigating their digital transformation journey effectively.

Bank Reputation and Trust: Impact on Client Satisfaction and Loyalty for Portuguese Clients

The aim of this article is to assess the most relevant factors influencing customer trust in the Portuguese banking sector following the Global Financial Crisis. It also aims to evaluate the impact of trust on satisfaction and satisfaction on loyalty. To address the research objectives and the hypotheses posed, a quantitative study with a descriptive design was conducted. Data was collected through an online survey administered to a sample of bank clients residing in Portugal. The findings indicate that respondents generally trust Portuguese banking institutions, although this trust has been affected by the Global Financial Crisis. The bank’s reputation and financial performance were identified as critical factors in the respondents’ choice of bank. Additionally, the results suggest that both global and domestic financial conditions, bank reputation, client satisfaction, and overall trust significantly influence client loyalty to the bank. This study provides valuable insights into client behavior and perceptions of banks, emphasizing the importance of factors such as trust, client satisfaction, and bank reputation in shaping client loyalty.

SUSTAINABLE FINANCING OF THE BUSINESS ENVIRONMENT IN THE REPUBLIC OF MOLDOVA: CHALLENGES AND SOLUTIONS

In a rapidly changing world, sustainable financing has become a necessity for economic and social development. With limited natural resources and growing environmental impact, the imperative for sustainable economic growth is globally recognized. Despite increased interest and initiatives in sustainability, significant challenges persist, including climate change, energy security, and natural resource depletion. This paper explores the landscape of sustainable financing in the Republic of Moldova, analyzing current practices, challenges, and opportunities. Drawing on fact-finding, comparative analysis, and correlation studies, the research methodology assesses the state of sustainable financing in Moldova. The literature review encompasses legislative acts, monographs, articles, and reports from international financial institutions. Findings reveal limited access to international funds through local banking institutions, hindering the development of green lending activities. To address this, increased cooperation with international investment funds is recommended, alongside the promotion of green lending products by local banks. Furthermore, there is a call for mandatory environmental management reporting by commercial banks to enhance transparency and accountability. Given the significant role of Small and Medium-sized Enterprises (SMEs) in Moldova's economy, the imperative arises to make their operations more environmentally sustainable. This entails reducing their environmental footprint and opening up avenues to international markets. Moreover, transitioning towards renewable energy sources and adopting energy-efficient technologies is underscored as vital for decreasing reliance on fossil fuels and addressing climate change. In essence, cultivating a culture of green financing in Moldova requires collaborative efforts, cooperation, and responsible investment practices. These measures are essential to safeguard environmental sustainability while promoting economic growth.

Beliefs of Employees in A Greek Banking Institution About the Role of Leadership and The Possibility of Transforming the Bank into A Learning Organization

Lifelong education in the workplace and the training of human resources are a primary objective for enterprises in the era of the knowledge society and lifelong learning in order to ensure their sustainability, growth and increased profitability. The alignment of the goals and actions implemented, the shared vision and the organizational culture that develops in an organization, together with the exercise of effective and innovative leadership by its senior managers, can contribute to its efforts to evolve and ultimately become a learning organization. This paper presents an analysis of a Greek bank's efforts to transform into a learning organization, focusing on employees' perceptions of this possibility and the role of leadership in the process. A total of 153 questionnaires were collected, with employees responding to closed-ended questions and statements. The research analyses the key principles for learning organizations and the role of transformational leadership using a descriptive and dynamic statistical approach. The findings and conclusions contribute to the understanding of transformational leadership practices.

Green HRM practices, organizational commitment, and citizenship behaviour in banks of Hyderabad, Sindh, Pakistan

The study explores the interplay flanked by green HRM practices (GHRMP) and organisational citizenship behaviour (OCB) in banking institutions in Hyderabad, Pakistan, focusing on the mediating impact of organisational commitment. GHRMP are recognised for promoting environmental sustainability and corporate social responsibility. OCB, reflecting discretionary employee behaviour, is pivotal for organisational success. This research aims to ascertain whether organisational commitment mediates the association between GHRMP and OCB in the banking sector of Hyderabad. Data were collected through closed-ended surveys, employing convenience sampling with 200 questionnaires from banks. Smart PLS software facilitated model development and assumption assessment, while SPSS was used for data analysis. Findings reveal that organisational commitment mediates the relationship between GHRMP and OCB in banking institutions. These results underscore the potential of GHRM to enhance organisational commitment, thereby fostering greater OCB participation among employees. This research contributes to academia by elucidating the connections among bank employee commitment, GHRMP, and voluntary employee behaviour. Banks can use these insights to devise and implement GHRM strategies that support environmental responsibility while enhancing staff engagement and organisational citizenship. Integrating sustainability initiatives into HRM processes can cultivate a culture of organisational citizenship and environmental responsibility.

Regional Government Strategy in Developing Small and Medium Industries (IKM)

Small and medium industries have an important role in driving overall economic growth. Industrial development, especially small industry, is aimed at becoming a high-quality role in the economy, so that it is able to compete both domestically and abroad. The aim of this research is to determine local government strategies in developing small and medium industries (IKM). Mataram City Regional Regulation Number 15 of 2016 concerning the formation and composition of Mataram City regional apparatus. The problem with the research is that there is still minimal information for SMEs to access capital in banking institutions, there is no supporting facilities such as machine tools. The location in this research is the Department of Industry, Mataram City SME Cooperative as the research object. This type of research uses descriptive with a qualitative approach. The data collection techniques that researchers used in this research were interviews, observation, documentation. Data analysis techniques use data reduction, data display, and drawing conclusions. The results of this research show. The strategy implemented by the Mataram City SME Cooperative Industrial Service was carried out well even though it was not 100% realized. Supporting factors provided by the Mataram City SME Cooperative Industrial Service. City SME cooperative industry. Providing training guidance, preparing budgets and providing facilities through cooperatives or banking institutions.

THE ROLE OF BOARD STRUCTURES IN INCREASING BANK ACCOUNTABILITY: GLOBAL EXPERIENCE

The governance of banking institutions plays a critical role in the stability and integrity of financial systems globally. The structure of the board of directors significantly influences how banks manage risks, comply with regulations, and align operations with the interests of shareholders and other stakeholders. Understanding how board structures differ across regulatory and cultural landscapes is crucial for enhancing bank accountability and performance. This article aims to critically evaluate how various board structures impact the accountability of banking institutions across different global contexts. The goal is to identify effective governance practices that can be adapted to improve bank accountability worldwide. Employing a comparative case study methodology, this research analyzes board structures in banking institutions across continents including North America, Europe, Asia-Pacific, the Middle East, Africa, and Latin America. Data from primary sources like interviews and secondary sources such as regulatory documents and academic articles are synthesized to assess the impact of board configurations on governance and accountability. The analysis reveals that effective board structures often include a high proportion of independent directors, robust audit and risk committees, and a commitment to diversity, which correlate with enhanced accountability and financial performance. However, variations exist due to cultural, economic, and regulatory differences that influence board effectiveness across regions. The findings suggest that while there is a global trend towards standardizing governance practices, local adaptations remain essential. The study recommends that banks and regulators focus on enhancing board independence, diversifying board composition, and strengthening risk oversight to improve governance frameworks. Future governance models should incorporate a dynamic approach to adapt to technological advancements, economic shifts, and societal expectations, ensuring that banking institutions can effectively meet emerging challenges and opportunities.

Strengthening Regulations towards Implementation of Intellectual Property-Based Financing Scheme with YouTube Content as Collateral

This research aims at examining how the regulator can make regulation to optimize financing implementation with <em>YouTube </em>content as a collateral. This research is considered necessary, because besides Government Regulation Number 24 Year 2022 which becomes the basis to give financing under an intellectual property as a collateral, banking institutions might still be in doubt to implement such a financing scheme due to many weak supporting regulations. This research is conducted with a normative-juridical approach method. The research shows that there are still many regulations which have not accommodated the financing implementation of intellectual property-based financing scheme basis, especially those regulations related to valuation, recognition of intellectual property as a banking asset and execution of intellectual property when a debtor default. The weak regulation of these three aspects makes financial institutions doubtful to implement the intellectual property-based financing especially because bank activities are to collect and distribute funds to the society. The conclusions of this research show that basically there has been a method or way to anticipate the three problems, but it needs to be legalized in a form of regulation so that the bank has legal certainty and protection in its financing with intellectual property as the collateral. The regulators are supposed to be able to create regulation to optimize financing implementation with intellectual property as the collateral.

IMPACT OF CORPORATE GOVERNANCE ON INTELLECTUAL CAPITAL EFFCIENCY - EVIDENCE FROM SRI LANKAN BANKING SECTOR

The study explores the intricate link between Corporate Governance (CG) factors and Intellectual Capital (IC) efficiency within the Sri Lankan banking sector. It delves into the impact of variables such as Board Size (BSIZE), Board Activity (BACT), Board Independence Composition (BIND), Audit Committee Size (AUDS), and Frequency of Audit Committee Meeting (AUDM) on Intellectual Capital, treating the latter as the dependent variable. For the five years between 2018 and 2022, the research technique comprises a thorough investigation of banking sector company in Sri Lanka, excluding three banks. The goal of the study is to obtain understanding of the connection between CG variables and IC efficiency through secondary data analysis using data from stock market transactions and audited financial statements. The main analytical tools are descriptive statistics and regression modeling, which enable a detailed comprehension of the relationship between CG dynamics and IC efficiency. Through a detailed examination of these variables across time and across different financial institutions, the study seeks to illuminate the ways in which CG practices impact the creation and application of IC in the banking industry. In the conclusion, the results of this study are important not only for scholars but also for professionals and decision-makers in the banking sector in Sri Lanka. The study provides significant insights that can guide strategic decision-making, governance reforms, and resource allocation within banking institutions, ultimately leading to improved organizational efficiency and long-term sustainability. This is achieved by revealing the complex relationships between Corporate Governance and Intellectual Capital.

THE IMPACT OF PORTFOLIO DIVERSIFICATION ON THE PROFITABILITY OF LICENSED COMMERCIAL BANKS IN SRI LANKA

Licensed commercial banks are essential for ensuring the stability of any country's financial system. According to the 2022 annual report of the Central Bank of Sri Lanka (CBSL), licensed commercial banks collectively held fifty-five percent of total assets. Portfolio diversification stands as a fundamental strategy for mitigating risk and enhancing returns in the banking sector. Thus, this study aims to investigate the relationship between portfolio diversification and profitability within the realm of licensed commercial banks operating in Sri Lanka. The researcher set out to achieve two research objectives by examining the correlation between the diversification index and profitability. Return on Asset and Return on Equity were used as measurement criterion of profitability. The dependent variable, portfolio diversification, was measured using a diversification index derived from the Herfindahl-Hirschman Index (HHI). A sample of ten listed banks was selected out of twenty-four licensed commercial banks. Secondary data were collected from the annual reports of ten listed commercial banks for the period of 2012 – 2022. A fixed effect model was selected among panel data regression models after conducting the F test, LM test, and Hausman test. The study's findings indicate that the diversification index has an insignificant negative impact on ROA and a significant negative impact on ROE. The equity ratio of banks has a negative, insignificant impact on both ROA and ROE. Bank size has a significant and negative impact on both ROA and ROE. Therefore, the findings of the study demonstrate that diversification negatively impacts both ROA and ROE. The findings from this study hold significant implications for both banking institutions and policymakers in Sri Lanka. Understanding the relationship between portfolio diversification and profitability can inform strategic decision-making within banks, guiding them towards more effective risk management practices and resource allocation strategies. In essence, this study contributes to the existing literature by offering empirical evidence and theoretical insights into the impact of portfolio diversification on the profitability of licensed commercial banks in Sri Lanka.

The Effect of Inflation, Interest Rates and Exchange Rates on Company Value (Case Study on Registered Banking Institutions on the Indonesia Stock Exchange)

This research aims to determine the effect of inflation, interest rates and exchange rates on company value using data from the financial reports of companies listed on the Indonesia Stock Exchange for the 2019-2023 period. The type of data used is quantitative data. The data source used is secondary data. The analytical tool used in panel data linear regression is EViews version 10. Simultaneous research results of the variables Inflation, Interest Rates and Exchange Rates have no influence on Company Value. Meanwhile, in partial testing, the variables inflation, interest rates and exchange rates have no effect on company value in banking institutions listed on the Indonesian Stock Exchange for the 2019-2023 period

Compliance of Sharia Audit in Islamic Banks and Islamic Financial Institutions in Palestine: A Literature Review

Sharia audits are required to make sure that Islamic financial institutions adhere to Islamic sharia standards in their financial and operational activities, and that the goods and services they provide to international financial institutions do not contravene any Islamic laws. This study aims to accomplish its objectives and provide answers to its questions. To accomplish the primary objective of this research, a systematic literature review, content analysis, and descriptive techniques were employed. This study used a systematic literature review methodology to locate, evaluate, and consolidate the extant literature on the analytical topic. This study analyses the differences in the roles of internal and external auditors between (IFIs) and (IBs) while considering the subject matter of internal sharia audits and the credentials of sharia auditors. This analysis is conducted through a literature review and examination of the existing literature on sharia audit compliance and governance. Consequently, the advantages of sharia compliance audits will be increased, and upcoming legal amendments will be put in place to minimize or eliminate the danger of sharia's noncompliance. This study provides a literature review and a theoretical and conceptual understanding of sharia audit compliance in Islamic financial institutions and banks. This study proposes a theoretical framework to evaluate the importance of sharia audit governance and identifies the basic elements that affect compliance, quality, and effectiveness in Islamic banks and financial institutions in Palestine. Compliance with the Islamic sharia audit can lead to optimal benefits, and future legislative changes can be implemented to minimize or eliminate the dangers of non-compliance with sharia.

A STUDY ON COMPARING BORROWER EASE WITH STATE BANK OF INDIA (SBI) AND LIFE INSURANCE CORPORATION (LIC) HOUSING FINANCE IN KRISHNAGIRI DISTRICT

Everyone needs his own servant. The latter is an effective and valuable incentive for the financial turnaround of residency activities. But, buying a home in the current situation is a difficult task, as it has a significant use. A running Elegance family cannot afford the cost of this use. To take a decision on this movement, the government offers to extend housing finance to every individual at a low loan rate. The housing finance sector allows deduction in bonds. Home financing mode of housing on a credit basis in which we pay fixed payments often with high loan charges. A credit position was granted primarily based on the qualifications of the individuals and the standards of the bank. Many banks and financial institutions have entered the housing finance venues that offer modest advances at low borrowing costs. The cost of financing is an essential element of advances. Banks and economic institutions provide types of financial prices for credit ratings, for example, fixed and drifting. Banks provide housing finance as well as loans for development, growth, transformation, development etc. The main reason for this study is to think and dissect between housing finance technology and customer pleasure of SBI the largest public sector bank in India and LIC being the largest personal convenience financial institution in India.

Islamic Perspective of Gold-Based Investment: The Case of Indonesia

Currently, there are many gold-based investment products, and investors are interested because some of them use sharia labels. Therefore, this study aims to identify and investigate gold-based investments from an Islamic perspective. It is hoped that this research can contribute new findings and enrich existing literature regarding gold investment in Indonesia, providing benefits for Muslim investors and the Muslim community in general. This study used qualitative research methods. Semi-structured interviews were conducted with parties who offer gold-based investment products on a large scale. Additional data sources include documents and manuscripts from the National Sharia Council (DSN-MUI) as well as author analysis. These findings show that not all gold-based investments in Indonesia comply with sharia principles. Only gold murabahah conducted by Islamic banking institutions meets sharia compliance.

Mortgage Financing and Affordable Housing Nexus: Evidence from Developing Countries

The study investigated the relationship between mortgage financing and affordable housing in Kumasi, Ghana. It explores how mortgage financing influences affordable housing supply. It identified 23 banking institutions of which 11 of them are into mortgage financing. Adopting the exploratory sequential mixed method research design, the study selected banks households and, realtors as respondents using both purposive and accidental sampling techniques. The study found that, in Kumasi and Ghana, housing is affordable on paper but very expensive on the ground as none of the houses supplied on affordable housing projects are affordable to middle- and low-income earners. The study acknowledged that the high level of LtVR has made mortgage financing very expensive to ordinary Ghanaians and such calls for government-insured mortgages to make housing supply less expensive. It found that the ANOVA results from a regression analysis with a multiple R of 0.240 and R square of 0.058 shows that only 5.8% of the total mortgage lending rates are influenced by the interest rate pegged by the Bank of Ghana (BoG) and hence there is a very weak relationship between interest rate and mortgage lending rate in Ghana. The study concludes based on the findings that in Kumasi and Ghana, housing units that are supplied using mortgage financing by the government realtors are more expensive than those built by private estate developers with or without mortgages. Hence a complete reform of the mortgage policy to include government-insured mortgages to make the secondary mortgage market attractive was recommended.