Banking Sector Of Bangladesh Research Articles

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

Purpose This study aims to assess the impact of determinants on the effectiveness of internal audit (IA) within the banking industry of Bangladesh. Design/methodology/approach The 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. Findings The 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 implications The 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/value This 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.

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.

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.

Exploring the Nexus of ATM Service Quality, Customer Satisfaction, and Loyalty in the Private Banking Sector in Bangladesh

Exploring the Nexus of ATM Service Quality, Customer Satisfaction, and Loyalty in the Private Banking Sector in Bangladesh

Flexible Work Arrangements in the Banking Sector of Bangladesh: A Human Resource Perspective

Whilethe developed nations are applying the flexible work arrangements (FWAs) as an alternative sustainable employee retention strategy, possibility of approaching FWAs in many developing nations, particularly in Bangladesh has remained unexplored. The study aims to investigate the Human Resource (HR) perspectives on whether FWAs are possible in banks in Bangladesh. To explore the state of current and possible potential practices of FWAs, the study conducted 9 (nine) in-depth interviews with HR managers of different categories of banks operating in Bangladesh. This study covered three patterns of bank ownership: private commercial, public commercial, and the bank regulator (central bank). The results of this study revealed that currently banks are informally using FWAs to a limited extent due to a lack of formal regulations and guidelines. The results also revealed that banks are thinking to practice FWAs-namely flex time, flex career, flex place, flex leave and job sharing in near future to match customer demand and to adapt to global banking standards. Additionally, the study disclosed thatthere is an urge to introduce standard regulations on FWAs in the banking sector. Theoretically, this study contributed by raising a new dimension of working arrangements in the banking sector ina developing country context and by underlining the importance of further research on FWAs because the implication of FWAs depends on socio-cultural context. For policy-making purpose, this study has identified the need to reform the existing regulations and to re-examine the organizational culture and human resource management practices of banks in Bangladesh to ensure a healthy work environment for work-life balance.

THE SIGNIFICANT CONTRIBUTION OF BANGLADESHI COMMERCIAL BANKS LIQUIDITY POSITION, BANK SIZE, AND INTERNAL CAPITAL GENERATING ABILITY TO INCREASE PROFITABILITY

The banking system is the lifeblood of an economy. This study aims to inspect the extent of the impact of banks’ managerial issues in terms of liquidity position, bank size and internal capitalgenerating capacity on the profit-making ability of commercial banks in Bangladesh during the period of 2007 to 2018. To examine data, a static panel model is constructed by considering 57 commercial banks. Indicators of a bank’s profitability include return on assets, return on equity, and net interest margin. The Fixed Effect model and the Random Effect models are considered as the baseline estimations and the Ordinary Least Square estimation was performed to inspect the robustness of the data. The study suggests that the liquidity position and internal capital generation rate have a highly positive and significant impact on bank profitability. But bank size is significantly negatively correlated with banking profit. The rivalry, as assessed by the HerfindahlHirschman Index, has a strong beneficial impact on the profitability of banks, supporting the impact of industry-specific variables. Inflation and spread are two macroeconomic factors that have a detrimental but minor effect on bank profitability. The findings might increase management’s awareness of the banking sector in Bangladesh as well as provide a proposition to policymakers.

Unlocking Profitability: Exploring the Impact of Bank-Specific and Macroeconomic Determinants on Return on Equity in Commercial Banking Sector of Bangladesh

This study investigates the factors influencing Return on Equity (ROE) within the banking sector of Bangladesh by analyzing a comprehensive dataset spanning from the year 2011 to 2020. Utilizing a combination of econometric techniques, including the one-step difference GMM, Driscoll-Kraay estimator, and Panel-Corrected Standard Errors (PCSE) methods, this study analyzes the influence of various bank-specific and macroeconomic variables. The findings reveal a nuanced pattern of impact on ROE. Earnings Per Share (EPS), Capital Adequacy Ratio (CAR), and Bank Spread exhibit a significant positive influence on ROE, reflecting the importance of profitability, capital strength, and interest rate spreads. Conversely, asset size, operating cost-to-loans ratio, total equity-to-debt ratio, and inflation exert a significant negative impact on ROE, highlighting the challenges associated with growth, cost efficiency, leverage, and inflationary pressures. These findings provide a multifaceted perspective on the dynamics of ROE, offering valuable insights for banks and policymakers striving to optimize financial performance and stability in the ever-changing economic landscape.

Impact of green HRM practices on bank employee service behaviors

This study aims to examine the influence of green human resource management (HRM) practices on the service behaviors of bank employees operating in the banking sector of Bangladesh. The study endeavors to offer valuable insights into the effectiveness of green HRM practices in enhancing practices and employee service behaviors in the banking sector. The results indicate that green human resource management practices have a beneficial influence on employee service behaviors by green knowledge sharing, green training and development, green performance appraisal, green reward system. This study also emphasizes how green HRM practices affect banks in terms of organizational sustainability, employee motivation, talent acquisition and retention, and the necessity of ongoing evaluation and improvement. Moreover, the current study used convenience sampling techniques to collect data from 258 workers of several commercial banks in Bangladesh using a self-reported questionnaire that had been modified from other studies. 95% confidence interval was used to accept the hypotheses during regression analysis. The results show that each and every hypothesis is supported, whereas hypothesis tests were analyzed using SPSS version 26.0. The results show that employees’ knowledge sharing tendency, training facility, performance appraisal and reward system have a significant and positive impact on bank employees’ service behavior. This study may contribute to the growing subject of sustainable HRM and offers useful advice for banks looking to include environmental sustainability into their HRM plans to spur progress and enhance service.

Evaluating the success of green accounting practices in the banking sector of Bangladesh

Green accounting has recently become more popular among Bangladeshi banks in order to reduce environmental damage and maintain ecological balance. Therefore, the main objective of this study is to evaluate the success of green accounting adoption by commercial banks in Bangladesh. Data were collected from Bangladeshi banks and subsequently analyzed using the Structure Equation Model (SEM), Spearman rho correlation, one-sample Wilcoxon signed rank test, Mann-Whitney test and Kruskal-Wallis test to examine factors influencing the present green accounting practice and performance of banks. The study results showed that green accounting knowledge and environmental knowledge contribute significantly to the present green accounting practice in Bangladesh. On the other hand, the policy of Bangladesh bank does not contribute significantly to the present green accounting practice. Additionally, the study's findings also showed that Bangladeshi banks' current use of green accounting practices and their financial performance are positively correlated. According to the study's findings, increasing the use of green accounting practices might improve their performance and improve the efficiency of financial transactions in Bangladeshi banks. The study outcomes may be used to popularize green accounting practices among banks to increase their performance and also save the ecosystem.