Banking Industry Of Pakistan Research Articles

The Impact of Workplace Bullying and Harassment on Employee Turnover in Banking Industry of Pakistan

This study has been executed with intent to find out the impact of workplace bullying and harassment on employees’ turnover among the bankers. Qualitative data was gathered through in-depth interviews from 50 bankers. Non- probability sampling technique was adopted. In this research study, the researcher has used the principle of purposive sampling. The results depict that bankers are being bullied but they do not want to leave their organizations due to bullying. There are many other factors that make them think to leave organization such as extreme stress, work burden and better opportunities for work. The results also revealed that employees who are being harassed do not disclose such incidents. This paper contains a message for the senior management of organizations to review their bullying and harassment policies. Moreover, this study suggests that there can be other factors that can be the reason for employee turnover.

Corporate Social Responsibility and Firm’s Financial Performance: Evidence from the Banking Industry of Pakistan

The present work examines the effects of corporate social responsibility on profitability (CSR) of banking sector of Pakistan. The existing literature mainly focused on manufacturing industry of developed countries, while this study investigating the impact of CSR on financial sector of Pakistan. Secondary data were collected from 15 different banks from their annual reports for the period 2007-2016. Furthermore, study used summary statistics and two step system GMM to analyse the impact of corporate social responsibility on the financial performance of banks and found significant positive impact of CSR on financial sector performance. Moreover, the present work also observe that banks with good history of CSR spends less at present as they have established good reputation in society. Our study provides important empirical insights for regulators and other key stakeholders especially State Bank of Pakistan and banking industry of Pakistan for improvement in firm performance and profitability.

Organizational and Personal Drivers of the Financial Sector: A Focus Group of Banking Officials in Pakistan

Purpose: This study intends to explore the key challenges the financial sector faces today about employees’ perspectives and how these challenges eventually play a role in the employee’s work-life balance.
 Design/Methodology/Approach: A Focus group was conducted with a leading multinational bank in Pakistan. Six managerial cadre employees participated in the focus group study. The focus group analysis suggests very stringent rules and regulations incorporated by SBP that bind each bank to undergo strict compliance.
 Findings: The challenge of customer retention, declining interest rates, coping with the frugal economic situation of the country, meeting customer satisfaction, incorporating personal relationship management, use of ancillary support services by customers, reward and recognition to employees, dealing with information savvy knowledgeable customers, work-life balance and overall motivation of the bank employees are assumed by the participants as the key challenges that drive the banking industry of Pakistan.
 Implications/Originality/Value: Senior management of the banking sector of Pakistan can learn from the problems discussed, and the possible solution proposed to the said problems. This research contributes to the body of knowledge while explaining the issues faced by the professionals working in the banking sector of Pakistan.

The Psychology of Resistance to Change: The Antidotal Effect of Organizational Justice, Support and Leader-Member Exchange.

In today’s business environment, the survival and sustenance of any organization depend upon its ability to introduce a successful change. However, in implementing a change, one of the biggest problems an organization faces is resistance from its employees. The current paper addresses this problem by examining the role of organizational justice dimensions in coping with the resistance to change through the intervening role of perceived organizational support (POS), leader-member exchange (LMX), and readiness for change (RFC) in a sequential framework. Data of 372 employees have been collected from the banking industry of Pakistan. The results obtained through the Partial Least Squares- Structural Equation Modeling (PLS-SEM) approach using SmartPLS suggest that distributive justice, procedural justice, and interactional justice play a critical role in lowering the resistance to change through POS, LMX, and RFC, contributing significantly to the theory and practice. Furthermore, this study also discusses recommendations for future research and limitations associated with this research work.

A comparative analysis of financial performance of Islamic banks vis-à-vis conventional banks: evidence from Pakistan

PurposeIn recent years, the fast growth of Islamic banks (IBs) has generated debates among policymakers and economists about the sustainability and performance of these institutions. This paper aims to undertake a comparative analysis of the financial performance of IBs and conventional banks (CBs) in Pakistan over the period 2008–2019 to evaluate how IBs are faring compared to their conventional peers.Design/methodology/approachThis paper considers Financial Ratio Analysis (FRA) to analyse and compare the performance of the top-10 IBs and CBs operating in Pakistan. The sample includes five full-fledged IBs and five CBs which offer Islamic windows in Pakistan. The top-five performing CBs offering Islamic windows have been selected in this study.FindingsThe results show that IBs are better capitalized, less risky and have higher liquidity as compared to CBs. In contrast, the profits of IBs are found to be lower than those of CBs.Research limitations/implicationsThe study has provided an analysis of financial performance only for Pakistan. A cross-country analysis could be more representative of the performance of IBs.Practical implicationsThe study infers that the size of the Islamic banking industry in Pakistan should be enhanced by opening new branches and promoting Islamic financial literacy.Originality/valueThe study assists investors, creditors, debtors and managers in making better decisions. It also provides the latest valuable information to regulators and policymakers that can be used to make rules and policies for the finance industry in Pakistan.

Do operational risk and corporate governance affect the banking industry of Pakistan?

Abstract Purpose – Due to increase in operational risk, banks are facing huge losses. In order to avoid losses, banks need to manage operational risk. This study aims to analyze the impact of operational risk management (ORM) processes, which include identification, assessment, analysis, monitoring and control in the presence of corporate governance (CG) that can also contribute to effective ORM practices. Design/methodology/approach – Operational risk management processes are used to manage operational risk along with CG. Primary data are collected through questionnaire from (167) operational risk managers of commercial banks. Multiple linear regressions has been run to analyze the data. Findings – Results indicate significant impact of CG and operational risk identification (ORI), monitoring and control on ORM practices in commercial banks of Pakistan. Originality/value – The study suggests policy makers to improve the ORM framework by CG. Beside this, in order to lessen operational risk, proper identification, monitoring and control of operational risk could also contribute.

Do operational risk and corporate governance affect the banking industry of Pakistan?

PurposeDue to increase in operational risk, banks are facing huge losses. In order to avoid losses, banks need to manage operational risk. This study aims to analyze the impact of operational risk management (ORM) processes, which include identification, assessment, analysis, monitoring and control in the presence of corporate governance (CG) that can also contribute to effective ORM practices.Design/methodology/approachOperational risk management processes are used to manage operational risk along with CG. Primary data are collected through questionnaire from (167) operational risk managers of commercial banks. Multiple linear regressions has been run to analyze the data.FindingsResults indicate significant impact of CG and operational risk identification (ORI), monitoring and control on ORM practices in commercial banks of Pakistan.Originality/valueThe study suggests policy makers to improve the ORM framework by CG. Beside this, in order to lessen operational risk, proper identification, monitoring and control of operational risk could also contribute.

Modes of Islamic financing and aggregate economic output: evidence from Islamic banking industry of Pakistan

With the evolution of Islamic banking, the economic impact of Islamic finance has been studied by many authors. Islamic banks significantly differ from conventional banks in terms of underlying contracts. The asset side of Islamic banks is composed of different modes of financing, which can be categorized at participatory and non-participatory modes of financing. This study aims to examine the relationship of modes of Islamic financing in connection to the real economic output of Pakistan. Using quarterly data from 2005 to 2019, we use autoregressive distributive lag (ARDL) model to analyze the impact of modes of Islamic financing and industrial output. Our findings reveal that non-participatory modes of Islamic financing play a significant role in deriving a healthy aggregate economic output. Therefore, Industrial production found to have a significant positive long run relationship with non-participatory Islamic financing. However, financing modes based on partnership does not have significant impact on total industrial production. The results also show that poor asset quality hinders the production process in the long run and decreases the economic outcome.

How Organizational Unfairness Impedes Service Employees Needs Fulfillment? The Case of Islamic Banking Industry in Pakistan

Purpose: The purpose of this study was to explore how organizational unfairness impedes fulfilment of various needs of non-managerial employees at Islamic banks. Methodology: The data were gathered through semi-structured interviews from sixteen non-managerial employees of different fully Islamic bank branches located in Rawalpindi and Islamabad, Pakistan. Findings: The study findings indicate that issues in the distributive, procedural and interactional justice elements of Islamic banks impedes fulfilment of basic, social, security, self-esteem, and self-actualization needs of non-managerial service employees of Islamic banks and adversely affects their wellbeing. Significance: This research contributes to the literature on organizational fairness by unpacking the ways in which issues in the organizational justice elements impeded non-managerial service employees’ life needs fulfilment. This study investigates the above-mentioned issue from the Islamic banks non-managerial employees’ perspective, which was not empirically investigated earlier. Limitations: The qualitative research findings might lack external validity or generalizability. In the future, a study could investigate this topic through survey research. Second, this research merely investigated how organizational unfairness impedes employees’ life needs. In future, a study could explore the strategies employed by the employees encountering organizational unfairness for resolving the issues relating to stress and other socio-economic aspects. Practical and Social Implications: This study findings provided an avenue to offer a number of practical implications to enhance fairness for non-managerial service employees in Islamic banks.

The rising trend of fraud and forgery in Pakistan’s banking industry and precautions taken against

PurposeThis study aims to investigate the involvement of employees in frauds and forgeries in banking industry of Pakistan and precautions taken against it. This research explored the types of frauds prevailing in Pakistan’s banking industry, and the causes of employee involvement in frauds.Design/methodology/approachIn-depth interviews with the officers working in fraud/compliance/risk department at commercial banks as well as the officials working in the inspection and policymaking departments at the State Bank of Pakistan (SBP) were conducted. Research questions were developed under the guidance of experts working in the banking industry, so the research possesses internal validity. Data was analyzed using thematic analysis.FindingsThis study revealed that the SBP has devised many policies and guidelines for commercial banks against fraud management, but these are not properly implemented. These policies also include precautionary measures, which are recommended by the SBP to lessen fraud. Besides this, banks are also taking initiatives of their own to control the rising trend of frauds and forgeries. At the end, brief conclusion and effective recommendations are given to the practitioners, policymakers and management.Originality/valueTo the best of the author’s knowledge, this area of management has not been explored by researchers in Pakistan; hence, this research provides valuable information to bank managers, risk management departments, risk avoidance policymakers, bank shareholders, depositors, borrowers and government agencies. This study provides deep insights into the prevalence of frauds in the banking industry of Pakistan.

Impact of Corporate Social Responsibility on Islamic Banking Customers of Pakistan

This study aims to analyze the impact of corporate social responsibility on trust level of customers in the Islamic banking industry of Pakistan. The impact of trust is further studied on customers’ repurchase intentions and their word of mouth intentions. A self-administered questionnaire was used to collect data from the customers of five different banks offering Islamic banking services in Pakistan. In order to explain the relationship between variables the model was tested using Structural Equation Modeling (SEM) using AMOS. Empirical results from this study show that CSR is positively related to customer trust, repurchase intentions and word of mouth intentions in the Islamic banking industry. The findings prove that hypothesized model fit reasonably well based on comparison fit indices. The study adds valuable insights to CSR related research in South Asia and particularly focuses on the factors that influence perceptions and behaviors of Islamic banking customers.

Creating advocates: understanding the roles of CSR and firm innovativeness

Although previous studies revealed the positive effect of CSR perceptions on customer behaviour, the relationship between CSR and perceived firm innovativeness (PFI) has been underexplored. The purpose of this paper is twofold. First, it attempts to propose and validate a model to comprehend the relationship between CSR and PFI. Second, it aims to investigate the mediating role of corporate image stemming from CSR and PFI in order to foster customer advocacy intentions. Data were collected from 360 customers of the retail banking industry in Pakistan, and the results indicate that customers’ CSR perceptions directly and positively influence PFI. Interestingly, corporate image fully mediates the relationship between PFI and advocacy intentions, whereas it plays a partial mediation role in the CSR-advocacy intentions relationship. The findings of this research expand the corpus regarding the roles of CSR and PFI in creating advocacy intentions among customers through the corporate image.

Liquidity Copiousness in Pakistani Islamic Banks: What can Banks Excess Liquid Assets Tell us?

This paper investigates Excess Liquidity problem faced by the Islamic Banking Industry of Pakistan because the Shariah Compliant Money and Capital Markets are in infancy stage in Pakistan. Demand for Shariah Compliant Sovereign Securities is very high, while the supply is very restricted compared to Sovereign Securities available to Conventional Banks in Pakistan. The purpose of this research is to review the impact of Excess Liquidity on Profitability of Islamic Banks vs. Conventional Banks in Pakistan. The research is based on secondary data of Islamic & Conventional Banks for a period of 10 years ranging from 2008 to 2017. The study uses Descriptive and Inferential Statistics based on Independent t-test & GLM Mediation Model analysis. The findings of this research is that Islamic Banks in Pakistan have positive Excess Liquidity while Conventional Banks have negative Excess Liquidity. Profitability of Islamic Banks in Pakistan is low as compared to their Conventional Counterpart. The Solvency, measured through Total Asset to Total Equity (TATER) is found to differ significantly for Islamic Banks than Conventional Banks. Based on Mediation Analysis, it may be concluded that: (1) The liquidity copiousness in Pakistani Islamic Banks in the shape of Excess Liquidity does have a direct impact on the Profitability of Islamic Banks; whereas in case of Conventional Bank of Pakistan the comparable Liquidity does have direct impact on their Profitability; (2) In Islamic Bank, the Solvency mediates the relationship between Excess Liquidity & Profitability. The Solvency in conventional banks also mediates the relationship between comparable Liquidity and Profitability

Finance as Worship or A Commercial Funding: Empirical Evidence from Islamic Banking Industry of Pakistan

Finance as Worship or A Commercial Funding: Empirical Evidence from Islamic Banking Industry of Pakistan The present study aims to determine the perception of general public well versed with the conventional education regarding the contemporary Islamic banking & finance as to whether they consider Islamic banking finance as worship or a commercial funding. A total of 644 questionnaires were distributed to collect the data. Independent sample t-test through SPSS was used to estimate the results. The findings revealed that the mean values of independent sample t-test of the Islamic bankers, conventional bankers, teaching faculty and non-finance industry professionals are 6.07, 4.91, 4.86 and 5.07 respectively. As the mean values of conventional bankers, teaching faculty and non-finance industry professionals are less than that of benchmark level of 6.0. Therefore, the study recommends authorities to formulate policies and initiate Islamic banking awareness programs both at the micro & macro levels. Keywords: Finance, Worship, Commercial Funding, Islamic Finance.

CSR, Co-Creation and Green Consumer Loyalty: Are Green Banking Initiatives Important? A Moderated Mediation Approach from an Emerging Economy

The homogenization of the banking segment has made it difficult for banking institutions to practice the quality of services that are needed in order to retain consumers. Thus, these days, finding ways to increase consumer loyalty—especially green loyalty—has become a challenge for the banking industry around the planet. Research has long acknowledged that corporate social responsibility (CSR) is a strategic concern that could help organizations to increase consumer loyalty. However, the impact of CSR practices on green consumer loyalty is rarely addressed in the extant literature. Hence, the present research investigated the impact of CSR on green consumer loyalty with the mediating effect of co-creation in the banking industry of Pakistan. The study also introduced green banking initiatives as a moderator between the mediated relation of CSR and green consumer loyalty, with the intention that such a moderator would strengthen this indirect relationship. The structural equation modeling technique was used for the data analysis. The results confirm that CSR enhances consumer loyalty, and that co-creation partially mediates this relationship. Furthermore, green banking initiatives further strengthen this relation. The results of the current survey could help banking institutions learn how they can develop core strategic considerations based on the integration of CSR co-creation and green banking initiatives.

Why Foreign Banks Fail in Emerging Economies: Risk Management Perspective from Pakistan

The tenacity of this paper is to understand the concept of ‘relative efficiency’ as an alternative measure to assess bank performance, and to investigate the progressive performance of foreign and domestic banks in Pakistan. A very steady growth is observed in assets of foreign banks in Pakistan although Pakistani banking sector has very limited contribution of foreign banks but its historic contribution is much accountable towards economic growth. The significance of this study is that we have conducted the study in Pakistan which was not explored earlier. A research design is the structure for investigation and way of finding out the answer of research question (Huizinga, 1999). We have conducted this research under the umbrella of Quantitative paradigm. Our preferred methodology is CAMELS. This system was developed by ACCION (Americans for Community Co-operation in Other Nations) in 1980’s to help regulator banks of North America (hUallachain, 1994). CAMELS methodology adopted by North America Bank regulators to know the financial and managerial reliability of commercial lending institutions. For sample selection of the banks, we used criteria sampling method that is a type of non-probability sampling. We took sample data of 16 banks working in Pakistan from the period of 2014-2016. Groups are structured according to their ownership status. After assessment of CAMELS rating system in the context of Pakistan banking industry, it is observed that CAMELS is an internal rating system and its results are not available to the general public but to the regulators and the directors of the banks, so we implement its ratios to avail the result of the sample banks. Results of international credit rating agencies such as S&P, Moody’s and Fitch should also be compare for similarities with CAMELS or any of the supervisory rating systems implemented in different countries. It would be productive research to study adoptability of CAMELS rating system in the context of Islamic banking system..

파키스탄 은행업 종업원의 직무 스트레스에 영향을 미치는 요인

파키스탄 은행업 종업원의 직무 스트레스에 영향을 미치는 요인

The Islamic Banking Sector Of Pakistan: The Impact Of Leadership Opportunities, Gender Differences, Working Conditions And Employee Performance On Job Satisfaction Of Female Employees Of The Industry

The findings of this research study is constructed depending the role of women in Islamic Banking industry of Pakistan. It has been conducted with an objective to determine the contrast of leadership opportunities, gender differences, working condition, employee performance with Job Satisfaction. The data has been collected from 200 male and female participants, representing the Islamic Banking Sector of Pakistan (Meezan Bank, Dubai Islamic Bank and Bank Islami). The result of the research shows a positive association in the selected dependent and independent variables. The study result further supports that in the current scenario the male gender participation for authoritative and leadership position is comparatively high as paralleled to female in the Pakistani Islamic Banking Sector of Pakistan. Further, it reveals that male working employees in the Islamic banking sector of Pakistan are far more satisfied as compared to female working participants. The result has reflected that the constructed model is significant (at the p < 0.001 level). The findings of this particular study possibly may assist the upper management to revisit their working environment policies and practices to consider females as equally responsible for challenging leadership roles, providing career path opportunities, and to promote Equal Employment Opportunities (EEO) in organizations.

Human Resource Management, Total Quality Management and Competitive Advantages: Evidence from Pakistani Banking Industry.

This study aimed to investigate the relationship between human resource management (HRM) practices, total quality management (TQM) practices, and competitive advantages in the banking industry of Pakistan. HRM practices included Recruitment & Selection, Training & Development, Performance Appraisal, and Compensation & Reward. TQM practices consist of Leadership, Continuous Improvement, Customer Satisfaction, Employee Empowerment, and Strategic Planning. And lastly, competitive advantages are represented by Cost Leadership and Differentiation. We applied (Obeidat, Yousef, Tawalbeh, & Masa'deh, 2018) model to the banking sector of Pakistan. An Adopted questionnaire was designed and distributed over a sample of 300 employees. The research hypotheses were tested by using structured equation modeling. The result shows that Compensation & Reward positively and significantly affect all TQM practices as well as cost leadership. Similarly, Performance Appraisal also produces a significant positive impact on Strategic Planning, and Leadership dimensions of TQM, Hoverer, negatively affect cost leadership. Recruitment & Selection positively affect cost leadership. Strategic planning an important factor, significantly affect both competitive advantage factors. Interestingly, Training & Development have a significant but negative effect on TQM factors namely Continuous Improvement, Leadership, and Strategic Planning. The findings imply that in the banking industry, the effect on HRM factors on TQM is not equal, some are even negative, hence should be used diligently with the perspective of both TQM and competitive advantages.

Why Islamic Banks are not Competitive in Islamic Country: An Empirical Evidence from Pakistan Islamic Banking Sector

Abstract: Islamic banks are founded on principles that constitute the guidelines governing any Islamic economic or financial dealing. There are almost 180 Islamic financial institutions operating all over the world with 8,000 branches contributing to 71%, or USD 1.72 trillion, of the Islamic finance industry's assets. There has been tremendous growth in the Islamic banking sector especially in Islamic countries with regions like GCC countries and Malaysia leading the way. The situation in the “Islamic Republic of Pakistan” has been quite different where there has been a steady decline in the total number of Islamic banks and their profits. It is important to identify the reason behind decline and failure of Pakistani fully fledged Islamic banking sector. Therefore, this study purpose is to highlight the main reasons for the decline of Islamic banking profitability in Pakistan. According to SBP, Islamic Bank Bulletin 2018, there are currently four fully fledged Islamic banks operating with 12.9% market share of Pakistan's banking industry. This study encompass a period of twelve years (2007 to 2018) which shows a gradual decline in the total number of fully fledged Islamic banks in Pakistan and gradually in the reduction of their profits. This study contributes by analyzing both internal and external factors ((Back specific/Internal, Environmental/Macroeconomic and External Factors) which have led to the decline in the profitability of fully fledged Islamic banks. Study is quantitative in nature and primary data was collected from 508 senior managers of Pakistani Islamic banks. Conclusively, finding reveal that internal/bank specific, external factors have significant and positive impact on Islamic bank’s profitability. The study provides clear, workable policy recommendations to be followed both by the senior banks management as well as the regulatory body (SBP). This study is truly unique as it clearly emphasizes the core weakness within the Islamic banking sector of Pakistan and provides practical recommendations and suggestions to save this declining sector. Keywords: Bank specific factors, Internal factors, Environment specific Factors, External Factors, Profitability, Quantitative Research, Fully Fledged Islamic Banks, Senior Managers, Islamic Bank Bulletin, Primary Data Analysis.