Banking Industry Of Bangladesh Research Articles

Interaction of Glass Ceiling and Workplace Commitment: Evidence from Banking Industry in Bangladesh

Interaction of Glass Ceiling and Workplace Commitment: Evidence from Banking Industry in Bangladesh

Performance Efficiency Evaluation of Information and Communication Technology (ICT) Application in Human Resource Management during COVID-19 Pandemic: A Study on Banking Industry of Bangladesh

With the things that go towards the efficiency of ICT usage in HRM, measuring and evaluating have become one of the key goals for researchers and practitioners. When it is related to crisis moments like the COVID-19 pandemic whereas considering the performance of organizations it becomes practically important to examine the level of performance efficiency in HRM. Therefore, in this study, some aspects are explored to know the efficiency of HRM performance with the application of Information and Communication Technology (ICT) in its functions maintaining social distance during the COVID-19 pandemic. While using the regression model, people management, regular HR activities, HR payroll and rewards, and performance evaluation and promotion are taken as independent variables while the HR performance efficiency is taken as a dependent variable. Correlation and regression analyses were conducted to examine the efficiency of HR functions during the pandemic following principal component analysis. The use of ICT assures Human resource management performance efficiency without taking face-to-face interaction during the pandemic. Further, the findings will help practitioners to adopt ICT in the HRM perspective of all organizations and to make the decision about how much modification needs to be done to maximize overall efficiency within the limited resources during any pandemic.

Non-Performing Loans and Its Impact on the Banking Sector: An Investigation on the Current Status of Bangladesh

Non-performing loans (NPLs) have become a frustrating issue for the financial institutions in Bangladesh. Our banking industry and the economy in general have taken a negative turn due to the increasing volume of NPLs. This paper aims to investigate the current status of NPLs in the banking industry of Bangladesh. The analysis uses the published data which have been congregated from the annual reports of Bangladesh Bank, websites of the scheduled banks of Bangladesh and the World Bank observed from 2008 to 2019. The study identified that for the last two decades, NPLs are the burning problems for the banks in Bangladesh. Worldwide the standard of NPLs is 2% or less but in our country, it is much intricate. The NPLs percentages in Bangladesh are 4 to 5 times higher than the standard which is disquieting for the entire banking industry. Based on the current investigation, it has been observed that the NPLs ratio is increasing unremittingly with the advancement of time. So, as a financial regulator, the central bank of the country (Bangladesh Bank) must give more emphasize to compactly control the NPLs of the country. This paper contributes by employing new dataset from Bangladesh.

Employees Perception on Recruitment and Selection Process in Banking Sector of Bangladesh

The banking industry is one of the major sectors contributing to the Bangladesh economy; it needs a considerable number of qualified and potential employees to attain the organization's goal. This study's main objective is to evaluate the effectiveness of the recruitment and selection process in the banking industry of Bangladesh based on the perception and experience of recently recruited employees in different private and public limited banks. Primary data were used to conduct a quantitative analysis for the following research problem. Therefore, 84 samples were retrieved out of 100 samples. Diagnostic test concludes that primary data are not normally distributed. In order to analyze the overall perception, Kruskal Wallis Test was applied as a measure of non-parametric test statistics. The findings disclose that median group identified significant relationship among E-recruitment strategies, Use of assessment centres, and processing time of recruitment with the overall perception of employees on recruitment and selection process. Finally, the study suggests that shortening the total procedural time, using innovative technology, and reviewing the policy regarding the recruitment and selection process can enable sound recruitment and selection practice in Bangladesh.

Non-Performing Loans: A Catastrophic Phenomena in Banking Sector of Bangladesh

Nonperforming loan (NPL) is one of the most cataclysmic phenomena for the entire banking industry in Bangladesh. NPLs in the banking sector have experienced a monstrous escalation of 300% in the last decade and statistically this figure is more than 1000 billion of Bangladeshi Taka (BDT). Even though international standards of loan classification and provisioning system is being adopted, the management of NPL is found unproductive. Fundamentally, deficiency of good governance, weak supervision, corruption, political interference in approving loans, culture of impunity and professional ineptness of bankers to deal with the pressing issue have played an instrumental role for the swift upsurge of NPLs. Pertaining to preventive measures, prominence needs to be placed on credit screening, loan surveillance, stringent law enforcement, centralized loan authorization system, strong monetary policy and strong loan review functionaries. Therefore, this study has emphasized on the challenges of NPL, evocative ways for improving the debt recovery environment and cracking the NPL problems in order to safeguard a sustainable banking sector of the country. Keywords : non-performing loan, loan classifications, provisioning, good governance, sustainable banking DOI : 10.7176/EJBM/12-27-14 Publication date :September 30th 2020

How Effective the Employee Training Programs Are? Evidence from Government Banks of Bangladesh

This paper attempts to identify the factors concerning the effectiveness of training programs of government-owned commercial banks in Bangladesh. The banking industry of Bangladesh has witnessed tremendous growth since the country’s independence. Need-based training and development of manpower have become prerequisites for the continuous growth of this sector. The prominent government banks conduct numerous training programs for the fresh recruits and the existing staff as well. A sample of 205 bank personnel who received training from the state-owned banks was surveyed through a structured questionnaire. The responses of the employees were analyzed using the Exploratory Factor Analysis and Multiple Regression Analysis techniques. This paper finds that the development of overall skills, reduction of stress level, development of technical skills, need-based training programs, long-run productivity, and quality of the instructors are the significant factors contributing to the effectiveness of training programs of government banks in Bangladesh. The finding of this study implies that the bank managers should emphasize more on the reduction of stress level, development of technical skills, need-based training programs, long-run productivity, and quality of the instructors that directly affect the effectiveness of the training programs run by the government-owned commercial banks in Bangladesh.

Behavioral determinants of nonperforming loans in Bangladesh

PurposeOver the last ten years (2010–2019), the amount of nonperforming loans (NPLs) has been more than tripled in the banking industry of Bangladesh. Thus, this paper explores the behavioral dimensions, which contribute to the NPLs.Design/methodology/approachBy analyzing social, cultural, psychological, political, economic, internal control mechanism and law enforcement contexts of Bangladesh, this study identifies nepotism (NE), moral hazard (MH ), inadequate collateral (IC), poor credit assessment (CA), lack of proper monitoring (LPM), repayment flexibility (RF), business risk (BR) and lending interest rate (LIR) as the catalysts of raising NPLs. Next, a structured questionnaire survey has been performed in Bangladesh among bank officials who closely work in credit risk management, credit supervision, corporate finance and loan recovery department. Finally, partial least squares (PLS) path modeling, a variance-based technique of structural equation modeling, is used in this study as a statistical tool to analyze the data.FindingsThis study finds that moral hazard problem, lack of proper monitoring, inadequate collateral and nepotism have significant positive impact on the raising of NPLs. Unfortunately, this study does not find any statistical significance of poor credit assessment, business risk and repayment flexibility on the NPLs in Bangladesh. Finally, this study reveals that lending interest rate has significant positive impact on the NPLs. Hence, this study concludes that domestic lending interest rate is not lower enough, and so this double-digit interest rate affects negatively to loan repayment.Research limitations/implicationsThis study concludes that moral hazard problem of borrower, lack of board independence, lack of proper monitoring, form and extent of collateral, management lobbying, indecorous personal guarantee by management, dependent-independent directors and nepotism are extensively contributing for occurring NPLs in Bangladesh. These noninstitutionalized stimulators should adequately be scrutinized by regulatory bodies, policy makers and banks. Besides, LIR needs to be decreased in a convenient level for mitigating NPLs.Originality/valueThis study is the empirical evidence of behavioral dimensions related with the growth of NPLs in Bangladesh by taking direct response from knowledgeable bankers.

Foreign Currency Bond as Solution to Trade Deficit Induced Liquidity Crisis in Banks: Evidence from Bangladesh

The purpose of the paper is to identify the impact of trade deficit of the economy on liquidity crisis of banks and develop the model of foreign currency bond to solve the problem in the banking industry of Bangladesh. From the data of 20 years, statistically significant negative correlation (-0.946) has been found between trade deficitof the economy and demand deposit of banks. Hence, simple linear regression has been applied to assess the impact of trade deficit on demand deposit of banks. Besides, a model of foreign currency bond in association with central bank and commercial banks has been proposed to solve the problem of liquidity crisis resulting from trade deficit. The period studied in this paper is 20 years out of available data of 25 years (1993-2018) omitting the data of 5 years due to outliers in value and unavailability of data just after Liberation War 1971. Besides, only trade deficit has been taken into consideration as determinant of liquidity crisis ignoring other factors as non-performing loan and statutory liquidity reserve however only trade deficit demonstrates 89.5 percent of the variation in the demand deposit of banks under this study.The paper is significant for the banking industry as it faces the problem of liquidity crisis frequently where the proposed model will generate fund for the commercial banks to solve the problem.

Sustainability Reporting of Banking Companies in Bangladesh: A Study on Environmental Aspect

The purpose of this paper is to know the rules and regulations of sustainability reporting in Bangladesh, the extent of sustainability reporting practice, way of reporting in banking companies of Bangladesh and to assess the disclosure of environmental aspects in sustainability report of the banking companies in Bangladesh for developing a sustainable reporting culture. Global Reporting Initiative (GRI) plays a leading role in developing guidelines in the preparation of sustainability reports. That’s why GRI’s standard guideline is taken into consideration. The study revealed that sustainability related information in the banking company’s annual report was not sufficient enough. Moreover, in most of the cases, it was found that the information regarding sustainability reporting did not meet the standard of GRI guidelines. The study sketches the current sustainability reporting trends and practices of the banking industry in Bangladesh. Specifically, the environmental aspect of sustainability reporting is the focal point of this study. Reporting style, report size, items disclosed in the report, environmental awareness activities, and future direction related to sustainability reporting practice are also found in this study. It can help different levels of managers, organizations, stakeholders and regulatory authorities to identify issues and areas that they could be focused on to formulate future plans for making a sustainable future reporting culture in the banking sector of Bangladesh in order to make the world more sustainable.

Corporate social reporting in the banking industry of Bangladesh: a test of legitimacy theory

PurposeThe purpose of this study is to test the legitimacy theory (LT) argument in the context of the banking industry of a developing country, taking Bangladesh as a case by interpreting the bank managers’ perceptions in legitimizing corporate social (CS) reporting.Design/methodology/approachThis study uses the Dhaka Stock Exchange (DSE) listed banks data during a 10-year period (2004–2013) and uses Islam and Kokubu (2018) CS reporting index. The LT variables are tested by using multiple regression method. A mixed-method of research with “triangulation design” has been used in this study for a comprehensive understanding of LT variables. In addition, a total number of 28 interviews (ranges from Corporate Social Responsibility Operational Manager to Managing Director/Chief Executive Officer) from 24 listed banks have been conducted to interpret bank managers’ legitimate perception in CS reporting.FindingsThis study supports the applicability of the broader thrust of LT for the banking industry of the developing economies in three ways. First, for companies with lower “proximity to end-users” by density in population disclose more social information than the companies with higher ones to gain/regain/maintain market legitimacy. Second, newer banks with less scope to reach proximity to end-users disclose more social information to fill proximity to tertiary clients’ gap to meet community expectation. Third, companies disclose more social information in their annual reports to legitimize corporate actions in response to the CS reporting initiatives taken by the stakeholders, particularly regulators.Research limitations/implicationsThe main implication of this study is that it extends the applicability of the LT for the developing country, in general, and for the banking industry, in particular.Originality/valueThe study enriches the existing LT literature of the developing economies’ banking industry by providing empirical evidence from the banking system in Bangladesh.

Intellectual Capital and Corporate Performance: Evidence From Banking Industry of Bangladesh

Intellectual capital (IC) is about the greatest competitive weapon for an organizational development. It becomes the most significant factor in the organization’s economic life. Therefore, the purpose of this paper is to examine the relationship between intellectual capital (IC) and corporate performance of the banking industry. This study used econometric models against five years of panel data from 2012 to 2016 of commercial banks in Bangladesh. The empirical study revealed a positive and significant relationship between value added intellectual capital (VAIC) and banks’ performances. Further, only capital employed efficiency (CEE) as a component of VAIC has a significant relationship with banks’ performance. In addition, structural capital efficiency (SCE) has a very high degree of moderating power on CEE which can be transformed into corporate performance. This study enriches the existing literature of IC and corporate performance and it may be beneficial for the sustainable economic performances of banking industry of Bangladesh.

CSR pyramid, CSR in education development and stakeholder's satisfaction: evidence from the banking industry in Bangladesh

CSR pyramid, CSR in education development and stakeholder's satisfaction: evidence from the banking industry in Bangladesh

Revisiting Sustainability Disclosure in Annual Reports and Websites: An Empirical Examination from the Banking Industry of Bangladesh

The aim of this study is to determine the current scenario of the disclosure of sustainability in the annual reports and websites of the listed banks in Bangladesh. In this study, the financial year 2019 has been selected (most current at the time of conducting this study) to examine the changes in various aspects of sustainability disclosure over the period of time. It is found that banks disclosed more information in annual reports compared to that of corporate websites. Based on average sentences disclosed, Human Resource Development disclosure is the highest, and Energy consumption and savings related disclosure is the lowest compare to other items disclosed. Based on average sentences disclosed, third-generation banks disclosed more information compared to first and second-generation banks, and conventional banks with Islamic windows disclosed more information compared to sharia-based Islamic banks and interest-based commercial banks. This study also develops a theoretical framework to explain the results.

Firm-Specific Factors and Stock Returns: Evidence from Selected Private Commercial Banks Listed on the Dhaka Stock Exchange

The purpose of this study is to examine how different firm-specific factors influence the stock returns of 29 private commercial banks (PCBs) listed on the Dhaka Stock Exchange (DSE) in Bangladesh. The research applied time series, cross-sectional and panel data models focusing on external and internal factors influencing the stock return of developed stock markets. Very little research has been conducted on how firm-specific factors influence the stock returns of developing or emerging stock markets. Considering the current scenario of the banking industry in Bangladesh, some major firm-specific factors must be taken into consideration to determine how these factors influence the stock returns of selected banks listed on DSE, while utilizing the panel data analysis to get more significant results. The study incorporates balanced panel data (3,712 observations) for the period 2009-2019 to investigate how firm beta (volatility), earnings per share (EPS), market to book value ratio (MTBV), firm size, volume of shares traded, and turnover by value influence the stock returns. The study incorporates the Hausman specification test and the Breusch–Pagan Lagrange Multiplier (LM) test, suggesting that fixed effect regression is more applicable than random effect regression. The findings show that the negative influence of firm beta and size is significant, whereas the positive influence of turnover by value and volume of shares traded on the stock returns is significant. The empirical analysis either supports or contradicts existing literature.

CSR pyramid, CSR in education development and stakeholder's satisfaction: evidence from the banking industry in Bangladesh

This study examines the effect of corporate social responsibility (CSR) pyramid on the satisfaction of stakeholders, with emphasis on the mediating role of CSR in education development. It also determines the manner to reconceived CSR to produce greater desirable educational outcomes. It collects data from 200 stakeholders who are involved in CSR programs in the banking industry in Bangladesh (BIB). Thus, the BIB is often engaged in CSR practices through the provision of financial assistance to individuals for the pursuit of further education and advancement. The study fills the literature gap in CSR practices of BIB, especially from ED perspective, which is one of the key practices of bank for stakeholders. Hence, it makes invaluable contributions to the scanty literature on CSR in Bangladesh, as it analyses the contributions of BIB towards ED through CSR. The findings of this study could be beneficial to CSR providers, ED practitioners and researchers.

Impact of statutory regulation and key internal factors on firm’s corporate social responsibility

PurposeThis study aims to examine the impact of statutory regulatory order by the government on the degree of corporate social responsibility (CSR) performance and disclosures. It also aims to empirically investigate the relationship of a firm’s key internal and governance factors with CSR performance and disclosures.Design/methodology/approachThe study is based on empirical data from all banking firms listed in the Dhaka Stock Exchange (DSE) for a period of 2011-2015. The difference in difference analysis has been used to test the regulatory impact, where content analysis has been performed to find CSR disclosure scores. The multivariate regression analysis has been used to test hypotheses to find impact of firm’s internal factor on CSR disclosures.FindingsThe analysis and results of the study show that there is no significant impact of statutory regulatory impact on a firm’s level of CSR performance and disclosure. On the other hand, the study has found that board expertizes and board meetings have significant positive impact on firm’s CSR while no significant impact is found for firm networks to influence firm’s CSR disclosures.Research limitations/implicationsThe main research limitation of the study is that it covers all listed firms of the banking industry in Bangladesh. Because of data inconsistency, other industries are not included in the data sample of this study.Originality/valueThe value of the study lies in its contribution to the empirical investigation of regulatory impact and key internal and governance factors in a developing country perspective, which will add value to the CSR literature.

Determinants of Commercial Bank Efficiency? Evidence from Bangladesh

First, this paper investigated the technical efficiency (TE) of the banking industry of Bangladesh during 2008-2015 employing the two stage Data Development Analysis (DEA) method. Results of the overall technical efficiency (TE) score ranged between 96.7 percent and 98.6 percent during 2008-2012 which suggested that the technical inefficiency of the banking sector of Bangladesh ranged between 3.3 percent and 1.4 percent. The results of the pure technical efficiency (PTE) score known as managerial efficiency showed that the average (PTE) of the banking industry fluctuated between 98.1 percent and 99.3 percent during 2008-2012. The PTE efficiency dominated the TE during 2008-2012. Secondly, the paper applied Tobit regression in determining factors that significantly affected technical efficiencies of the Bangladesh banking industries. The Probit results of CAMEL and other bank internal factors showed that both the CAMEL model and the CAMEL Plus model provides an important explanation for both TE and PTE. This paper found, among factors, capital adequacy (EQTA), asset quality (LLOSSTA), and bank profitability (ROA) were significant factors for TE and PTE of the Bangladesh banking industry. Among bank internal factors, bank size (logTA) and bank branches (Branch) were significant determinants for bank efficiency. The paper provided the policy implication for bank management.

The Impact of Knowledge Capture and Knowledge Sharing on Learning, Adaptability, Job Satisfaction and Staying Intention: A Study of the Banking Industry in Bangladesh

Abstract The Knowledge Management (KM) has been defined as performing activites in discovering, capturing, sharing and applying knowledge in a more effective and effieicnt way. This study looks at only two such processes namely: capruring and sharing knowledge and their sub-processes. The purpose of this study is to conduct exploratory research to investigate the extent to which the sub-processes of knowledge capture and knowledge sharing of knowledge management impact the employee learning, adaptability, Job satisfaction and intention to stay on the job. This research was conducted using a purposive sample from financial services firms in Bangladesh. The sample consisted of 254 respondents from 23 different branches of eight commercial banks drawing from all levels of employees in the organizational hierarchy. The partial least squares (PLS) approach using Smart PLS has been used to test both the measurement and structural models. The findings of this study confirm that it is not the KM processes rather the sub-processes of KM process that can positively impact on employees' outcomes. This study involved self-administrated questionnaires and was open to all levels of staff and measured perceptions of the employees as opposed to actual behavior. This study suggests that employees' learning and adaptability depend on the usability and comfortability of the knowledge management initiatives undertaken by the management. Practitioners may employ the same experimental method using the instruments developed for this study to analyze the impact of the subprocesses of knowledge capture and knowledge sharing on employee outcomes. This study contributes to the existing literature of knowledge management that how the sub-processes of knowledge capture and knowledge sharing motivate employees to learn and adapt and how learning and adaptability contribute to job satisfaction and staying intention.

Employer Branding Strategy: An Empirical Study on Private Banks in Bangladesh

The Banking industry of Bangladesh is the most contributing sector in the growth of the country’s economy. To grow and maintain this contribution, operating banks should be careful in talent hiring. Employer branding strategy (EB) helps in this regard by branding the employer’s image particularly. This study aims to explore the current practice of EB strategy in private banks and the presence of its factors. This study showed that both employers and employees are not conscious of the term. Also, the presence of the factors in the organization is not satisfactory. This study provides suggestions in designing and implementing employer branding strategy consciously and in a planned way so that both employers and employees can reap the maximum benefits of EB strategy.

Impact of Basel III on Profitability & Capital Adequacy of Private Commercial Banks in Bangladesh and Banking Generation Wise Implementation Status of Basel Accord in Bangladesh

Nowadays it becomes paramount to keep a vigilant eye on the capital adequacy, liquidity, and risk management functions of the banks in order to ensure prudential governance. One single globally accepted solution for this is to be compliant with the principles of Basel Accords. Basel Implementation has greater consequences in the context of the banking industry of Bangladesh. On one hand, fortified capital and liquidity requirements helping the banking system of Bangladesh to be stabilized and safer, on the other side, it is somewhat expensive for banks to hold extra capital and to be more liquid. This study attempts to reveal the implementation status of Basel III by generation wise banks in Bangladesh. Furthermore, an analysis has been conducted to divulge the impact of implementing Basel III on the profitability and capital adequacy of banks. Nine (9) Private Commercial Banks, from different generations, have been considered to determine the linkage between the financial performance and Basel Standards. The gap among the generation wise banks in implementing Basel Standards also been addressed in the study.