Banking Sector Of Bangladesh Research Articles

The effects of board size and board composition on CSR disclosure: a study of banking sectors in Bangladesh

PurposeThe purpose of this study is to provide a profound understanding of the nature and extent of corporate social responsibility (CSR) disclosure in the annual report by the listed banking sectors in Bangladesh for examining the effect of board size and board composition on CSR disclosure.Design/methodology/approachThe sample selected of all the 30 listed banks enlisted in the Dhaka Stock Exchange and the study used a content analysis approach. An ordinary least square regression model is fitted to the data for assessing the effect of independent variables on the total CSR disclosure score. An un-weighted approach has been used for this study.FindingsThe results of the study demonstrate that the extent of CSR disclosure of listed banks in Bangladesh varies from 11.11% to 73.33%, and on average, they report 45.37% and 43.44%, respectively. Moreover, the study observed a significant relationship between the proportion of female directors and CSR disclosure. Conversely, board size has been found no significant relationship with the CSR disclosure but the proportion of independent directors has been found a significant relationship with the CSR disclosure in the annual report by the listed banking sectors in Bangladesh.Social implicationsThe study is expected to get a maximum scenario of CSR disclosure of banking sectors in Bangladesh. Government and other regulatory bodies can also get full information concerning CSR disclosure practices for formulating guidelines in this regard. If the Government of Bangladesh implicates the policies that the banks are to nominate a required number of female directors to boards, the consideration of the significant number of female directors and their power will be able to protect the interests of different stakeholder groups notably.Originality/valueThe study contributes to the CSR literature as it presents empirical evidence of the effects of board size and board composition on the CSR disclosure of banking sectors in developing countries such as Bangladesh.

Skills Gap of Business Graduates in the Banking Sector of Bangladesh: Employers’ Expectation Versus Reality

Bangladesh is a fast growing economy and has managed to maintain an impressive annual average growth rate of above 6 percent over the last 10 years. Although there are almost 2 million young people who enter the job market every year, they often fail to meet the demands of the existing job market due to lack of adequate skills. Most of the graduates struggle to find a decent job as their skills fail to match the employers’ expectations and needs. As the skill gap is brewing up creating a rise in unemployment, there is an urgent need for actions to enhance employability prospects of fresh graduates. In this study we aim to investigate the skill competence and skill gap of business graduates in the banking sector of Bangladesh. We utilized the mean scores of employability skills in terms of their significance as perceived by the employers in banks and the actual competency of business graduates. Findings of this study will allow students, employers, educators and policy makers in Bangladesh to recognize the critical areas where business graduates are lagging behind in the banking sector thus enabling them to take effective measures in order to reduce the skills gap.

The Impact of Rewards on Employee Performance: A Study of Commercial Banks in Noakhali Region

Rewards are benefits that come from performing a job, providing a service, or performing a duty. Rewards are one of the most important tools to encourage employees in the workplace. The goal of the reward system is to deliver positive results. The purpose of the study was to examine and analyze how the rewards system of the banking sector in Bangladesh helps employees to acquire work skills. The aim was to find out which aspects of the reward system work best and which aspects can be further improved and enhanced to increase employee satisfaction. The experimental part of the project was conducted using a quantitative research method. The size of the sample was 80. Data was collected with the help of questionnaires issued to the respondents working as ban bankers. The questionnaire consists of nine variables that are being used as rewards for employees. Frequency tables and graphs based on descriptive statistics were used in the study to provide information about variables in the population. The result shows that the mean for salary evaluation, bonus, benefit, promotion, recognition, career, responsibility learning opportunity from a low 2.82 to a high of 4.02. The responses of salary evaluation, benefit, promotion, career advancement show that employees consider this factor slightly important than factors as mean value is greater than 3.5. The standard deviation of promotion and responsibility shows that these variables have extensive responses than their mean as value indicates 0.98 and 0.94 respectively. The results of the study revealed how employees responded to current reward systems. The results conclude that reward systems have a significant effect on employees' attitudes toward work. The study suggested improving the reward system of companies to increase the level of satisfaction among employees.

Determinants of service quality and its effect on customer satisfaction and loyalty: an empirical study of private banking sector

PurposeThe main purpose of this study is to investigate the impact of various service quality dimensions, namely reliability, responsiveness, visibility, employee commitment and access to service on customer satisfaction in the private banking sector of Bangladesh. The research also investigates the relationship between customer satisfaction and loyalty and effect of demographic variables on customer satisfaction.Design/methodology/approachThe researchers distributed 320 self-administered survey questionnaires among private banks' customers in Bangladesh and obtained 200 useable responses with a 62.5% valid response rate. The research data were analysed using confirmatory factor analysis (CFA) and structural equation modelling (SEM) approaches. Analysis of variance and logistic regression have also been used to obtain the supplementary findings.FindingsThe research findings indicate that visibility, responsiveness and employee commitment have positive and significant effect on customer satisfaction, whereas reliability and access to service are found to have insignificant influence on customer satisfaction of private banking services. The findings of this study also revealed that customer satisfaction has positive and significant relationship with customer loyalty. But except respondents' occupation type, all other demographic variables have no statistically significant relation with customer satisfaction.Research limitations/implicationsThe research focused solely on the private banking sector of Bangladesh, and thus the results may not be applicable to other service sectors.Originality/valueThis study conducted on customers' perception of private banking services is based on extended service quality dimensions and its relationship with customer satisfaction towards loyalty. The present research findings are anticipated to offer the guidelines for improving the customer satisfaction and loyalty of private banking services in Bangladesh as well as other countries.

The Relationship Between Corporate Governance and Corporate Social Responsibility Expenditure in Bangladesh: Moderating Role of Firm Value

This article aims at identifying the relationship between corporate governance (CG) and corporate social responsibility expenditure (CSRE) for the Bangladeshi banking sector. CG has been considered as the single independent variable divided into three components: board size (BS), gender diversity (GD) and board members’ interrelationship (BMI), and CSRE has been considered as the dependent variable. Further, a single moderator—firm value (FV) as been employed in order to test the moderating influence. Annual reports from 2015 to 2019 (5 years) of 35 banking firms have been used as samples. The study utilized Pearson’s correlation coefficient in order to test the direct relationships and regression analysis to test the moderating effects. The analysis has revealed that BS and GD are positively associated with CSRE while BMI has a negative association with CSRE. Furthermore, has been revealed that FV can moderate all the direct relationships. The study is expected to aid researchers in further empirical investigation over this important issue and guide policymakers to obtain more representative outcomes to make constructive decisions regarding CG and CSRE that would, in turn, increase FV.

Impact of Rewards on Employee Performance: A Study on Private Banking Sector in Bangladesh

Reward management is a function of human resource management which is considered as a strategic asset for any organization. Therefore, this study is aimed to illustrate to what extent do rewards has an impact on employee performance in private banking sector in Bangladesh. More specifically this study has investigated the relationship between extrinsic reward, intrinsic rewards and employee performance level in private banking sector in Bangladesh. A total of 61 employees from 17 private banks were selected as sample to collect data through structured questionnaire including 11 questions. Descriptive statistic was used to provide a narrative view of the study while multiple regression analysis was undertaken as a statistical tool to do hypothesis testing. The result indicates that there is a strong positive relationship between intrinsic rewards and employee performance meaning that employees are highly interested to learn through training, solve complex challenging task, recognize by organization, receive feedback from managers and achieve organizational goal. The research result can be used as a guideline for other private banks in Bangladesh to have a better understanding of significance of reward system on employee performance that will help to develop a strategic reward system for sustainable competitive advantage

Investigating the Effect of Women’s Position on Advancement in the Banking Sector of Bangladesh

The paper aimed at investigating the existing status and the impact of giving promotion on women’s position in the banking industry. The stud was used purposive sampling on 250 employees serving the public, private and specialized banks. Normal frequency distribution as well as inferential statistics (χ2-test) was applied to analyze data. For examining the effect of the number of promotion received by employees on gender position they hold chi-square test statistic was used. The study reveals that there was 85% of male and 15% of female employees worked in the banking industry. It was observed that female employees worked 16.7% of state-owned commercial (SOBs), 13.5% of private commercial (PCBs), and 13.08% of specialized (SPBs) banks (shown in Table 5). Consequently, a few numbers of female employees were at the senior level. The entry level female employees were 25% of female observed. The study also found that there was a strong association between the women’s position and the number of promotion they up gradated. The study has suggested for managerial as well as policy implications the study suggested for further study to treat equally sustaining in the competitive field of financial institutions.
 Int. J. Soc. Sc. Manage. 7(4): 191-197.

A Total Communication Package for the Business Executives: Importance of Attitude, Culture, Leadership and Other Factors

Recent studies suggest that a series of contextually appropriate and effective communication training package is demanded by the employers and HR practitioners in the job market. However, the ways to design an effective, comprehensive and sustainable communication development program for the business executives have rarely been explored in the extant literature. This paper introduces the concept of a total communication package (TCP) that can help design a better communication development program for the business executives. This qualitative research uses the interview findings from 20 top executives from the banking and telecommunication sectors in Bangladesh to unpack the concept of TCP for the HR practitioners.

Analysing the Return on Asset to Construct Foretelling Indicator for Bangladeshi Banking Sector

Financial institutions and banks are required to follow mechanisms to monitor the positions and create stimulas for sensible risk-taking by divisions a well as individuals. Risk measurement comprises of the quantification of risk exposures, whereas risk management demonstrates to the overall procedures by which managers fulfill these needs to identify the risks and recognise the category of the risks it faces. This research targerts on the economic instability faced by banks in financial arena in terms of the crises affairs in regard of economic distress. Here, the methodology followed is based on the CAMELS framework variables. CAMELS is a short form stands for: capital adequacy (C), asset (A), management (M), earnings (E), liquidity (L) and sensitivity to market risk (S). Based on these nomenclature, a couple of variables should be selected, such as capital asset ratio, cost income ratio, non-performing loan, non-interest income as component series and return on asset (ROA) as the reference series to identify turning points of economic volatility in banking sector of Bangladesh. Thus, by forecasting the directional deviations it could make financial policymakers aware of the changes at early stage in financial markets and banking industry and privilege them to undertake precautionary steps for preventive purposes. The constructed MPI should have a incredible lead time of about 5 to 7 months on an average in case of prediction against leading for the reference series. By renovating financial efficacy of venture banks, Bangladesh also should recover their subsequent banking system to execute these suggestions.

Benchmarking and Rating of Private Commercial Banks of Bangladesh Through CAMELS Components

The banking sector of Bangladesh is becoming more complicated than before. Ensuring the financial stability of the economy, monitoring, supervision, and continuous performance evaluation of the banking sector are compulsory. The present study, therefore, is an attempt to evaluate and compare the performance of our banks. One of the most effective supervisory techniques, CAMELS rating system has been used to benchmark and rate the banks based on their performance. In this study, 21 private commercial banks (PCBs) have been chosen as samples to meet the purpose of the study. Data for analysis has been collected from the banks’ annual reports for the period of 2008 to 2018. The result shows that none of the banks could achieve a 'strong' position, and only SEBL was able to secure a ‘satisfactory’ mark. Unfortunately, AB bank was rated "marginal" in the composite rating, which is the lowest rating among the sample banks. Hence, AB bank needs to develop reform and follow-up programs as soon as possible to avoid financial failure.

Adoption and Application of International Financial Reporting Standards (IFRS) in Banking Sector of Bangladesh : A Comprative Study

The purpose of this study is to comparatively analyze the adoption and implementation of International Financial Reporting Standards (IFRS) in the banking sector of Bangladesh both traditional and Islamic banking. The study employs a literature-based method which is a kind of qualitative research approach. Using exploratory analysis the study identifies and compares adoption and application scenarios of IFRS in the traditional and Islamic banking sector as well as identifies major benefits and problems in the adoption and application of IFRS in both sectors. This study concludes that the adoption and application scenarios of IFRS in the banking sector are the satisfactory level and adoption of IFRS offered various benefits but a complete implementation of IFRS by Islamic banks has been proven to genuinely violate the shariah principles. Therefore a separate accounting framework for Islamic products and transactions is required. As the existence of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is still relevant and essential for the development of Islamic financial institutions. However continuous dialogue and consultation between the International Accounting Standards Board (IASB) and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is needed to harmonize and minimize the difference between the two frameworks. This study expected to benefits the accounting standards-setting bodies and the interested parties as input for them to make a decision whether all standards provided by IFRS are applicable for Islamic Financial Institutions(IFIs) or not.

Exploring Effective Factors in the Demographic and Motivation Issues of the Banking Sector of Bangladesh

The paper attempted to explore the most effective factors of demographic outlined affecting employees’ motivation. With a view to empirical analysis data were collected from 400 bank employees. In the demographic issues gender, age, experience, pay, type and name of the bank, present and prior designations etc. were considered. For inferential statistics there were five regression models with ANOVA and coefficients models developed in the study. The dependent variables were namely work experience, present basic and gross salary, and initial basic and gross salary and 94%, 77%, 68%, 48% and 35% respectively explained by other independent predictors. The study found that work experience was strongly affected by age. On the other hand, present pay (basic and gross) was highly subjective by present designation and initial basic and gross salaries were prejudiced by initial or first joining designation of the employees. The study was also observed on findings that age, present and first joining designations modify employees’ motivation in the banking sector of Bangladesh (showed in Table 18).

The Effect of Non-performing Loans on Performance and Profitability: A Comparative Analysis from Banking Sector of Bangladesh

The Effect of Non-performing Loans on Performance and Profitability: A Comparative Analysis from Banking Sector of Bangladesh

Corporate Governance Status in the Banking Sector of Bangladesh : A Comparative Study

Corporate Governance Status in the Banking Sector of Bangladesh : A Comparative Study

Value relevance of integrated reporting: a study of the Bangladesh banking sector

This paper aims to investigate the determinants of integrated reporting (IR) and its association with firm value and liquidity in the context of voluntary adoption. The data cover the period 2013–2018 of all banking companies of Bangladesh that construct 144 firm-year observations. An IR index is developed using international IR framework 2013, and content analysis is performed to measure IR adoption and practice. In addition to ordinary least squares regression, two-stage least squares method is used to minimize the endogeneity concerns. The result claims that banks with bigger board size, higher proportion of female and independent directors, and larger growth opportunity are more likely to adopt and practice IR. This paper documents that IR practice has a significant positive impact on the firm value, which is consistent with the theoretical prediction of corporate disclosure and firm value. Alternatively, the result does not suggest any conclusive evidence on the association between IR practice and stock liquidity. The findings of this paper could assist the regulators for preparing and issuing guidelines for this new reporting paradigm. This research, however, acknowledges the small firm-year observations and subjective judgment of self-constructed IR score.

How CRM Components Impact Customer Loyalty: A Case from Bangladesh Banking Industry

The purpose of this study is to determine the impact of customer relationship management (CRM) components on customer loyalty of a firm. The three components of CRM in this study are customer knowledge, customer orientation, and technology capability. A structured questionnaire with a 5-point Likert scale was used to gather the data by conducting a survey. The sample size is 200 and chosen on a convenient basis. Indicators were generated based on the literature review. Data were analyzed by using PLS 3.0 software. The key finding is that customer loyalty is negatively impacted by the CRM component, customer knowledge. On the other hand, the impacts of customer orientation and technology capability on customer loyalty have been found to be significant and profound. This study adds to the existing pool of knowledge on CRM components and customer loyalty from the perspective of the Bangladesh banking sector. The findings may facilitate bank officials and can be used as a strategic instrument for cultivating customer loyalty in the Bangladesh context.

Building Vulnerability Predictive Indicator for the Banking Sector

Abstract
 For risk and capital measurement, banks and other financial institutions need to meet forthcoming regulatory requirements. However, it is a serious issue to think that meeting regulatory requirements is the sole or even the most important reason for establishing a scientific, sound risk management system. To direct capital to activities with the best risk/reward ratios, managers need reliable risk measures. To stay within the limits imposed by readily available liquidity, by creditors, customers, and regulators, they need estimates of the size of potential losses. They need mechanisms to monitor positions and create incentives for prudent risk-taking by divisions and individuals. Risk measurement deals with the quantification of risk exposures, whereas risk management refers to the overall process by which managers satisfy these needs and follows to define a business strategy, to detect the risks to which are visible, quantifying those risks, and to control and understand the nature of the risks it faces. This research focuses on the economic vulnerability faced by banks in the financial sector in terms of the crises issues perspective of economic distress. Here, the methodology followed is based on the CAMELS framework variables. CAMELS is an abbreviation for: capital adequacy (C), asset (A), management (M), earnings (E), liquidity (L) and sensitivity to market risk (S). Based on these terminologies, a couple of variables should be selected, such as capital asset ratio, non-performing loan, cost income ratio, industry production index, non-interest income, reserve of gold, inflation, stock turnover ratio, real interest rate as component series and return on equity (RoE) as reference series to identify the turning points of economic vulnerability in the banking sector in Bangladesh. Thus, by forecasting the directional changes it could make policymakers aware of changes in the financial markets and banking economy and allow them to undertake preventive steps for remedial purposes. The constructed MPI should have a remarkable lead time of about not less than 6 months on average in case of prediction against the leading for reference Series.By mending the financial efficacy of investment banks. Bangladesh also should improve their corresponding banking system to implement these suggestions.

Influence of Liquidity on Profitability of Commercial Bank’s in Bangladesh

This paper aims to drill down the impact of liquidity on commercial bank’s profitability in the banking sector of Bangladesh. To attain a sound outcome this paper used a sample of 10 commercial banks that are enlisted in Dhaka Stock Exchange. The duration of collecting data was from 2012 to 2019. For attaining the objective properly the paper used four measures of liquidity such as loan to deposit ratio, deposits to assets ratio, loan to asset ratio, and cash deposit ratio. Return on equity (ROE) and return on asset (ROA) is another measure to analyze the impact on profitability. The outcome of this paper states that the impact of liquidity on commercial bank’s profitability in Bangladesh is not statistically significant. Keywords: Profitability, ROE, ROA, Liquidity, loan to deposit ratio, deposits to assets ratio, loan to asset ratio, and cash deposit ratio. DOI: 10.7176/RJFA/11-14-11 Publication date: July 31 st 2020

Shareholding Patterns and Financial Performance: Evidence from the Banking Sector in Bangladesh

This study attempts to examine the relationship between shareholding patterns and banks’ financial performance, as defined from three different dimensions, namely, profit-based performance measured by return on equity (ROE), market-based performance measured by Tobin’s Q (TQ) and valuebased performance measured by economic value added (EVA). It included 29 out of the 30 banks listed on the Dhaka Stock Exchange for the period 2013–2017, providing a balanced panel with 145 observations. All data were collected from the annual reports of the respective banks. The randomeffects GLS regression model was employed to test the chosen hypotheses. This study found a conflicting result, i.e. there was a relationship between some, but not all of the patterns of shareholdings and financial performance of the listed banks in Bangladesh. For example, a significant relationship between foreign shareholding and banks’ financial performance, as measured by ROE, TQ and EVA-log, was found. Sponsor-directors and general public shareholdings were found to be significantly related to ROE and EVA-log, but insignificantly associated with TQ. However, institutional and government shareholdings were insignificantly related to the banks’ financial performance, regardless of the measures employed to assess it. This study contributes to the existing literature by exploring the relationship between shareholding patterns and banks’ financial performance, and may indicate the need for a restructuring of the existing shareholding patterns in the banking sector in Bangladesh in order to maximise performance. This study is distinctive compared to prior studies, as it examines the relationship between the shareholding patterns disclosed in the annual reports of the sampled banks and banks’ performance, as measured by EVA-log along with ROE and TQ, which have not been covered earlier. KEYWORDS: Shareholding patterns, Financial performance, Economic value added, Banking sector in Bangladesh

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.