Banks In Pakistan Research Articles

Perception of Shariah Scholars toward Islamic Banking in Pakistan

Purpose Islamic finance growth depends on factors that are crucial for fostering positive perceptions and increasing acceptance, particularly in Muslim countries. This study aims to investigate the influence of awareness, knowledge, religion and the advantages on perceptions of Shariah scholars toward Islamic banks in Pakistan and the mediating role of attitude. Design/methodology/approach The study collected data through a questionnaire from 200 Shariah scholars in Pakistan who have completed or are currently enrolled in Islamic banking and finance courses. It employed exploratory and confirmatory factor analyses using SPSS and AMOS software to analyze the data to evaluate measurement and structural models, ensuring the validity and reliability of the constructs and testing hypotheses to examine the relationships among factors and perception. Findings The study identified a significant influence of knowledge and attitude on perception, thus supporting H3 and H9. H2, H6 and H8 indicate an insignificant impact of awareness, religious motivation and advantage on perception. This highlights the need for Islamic banks to bridge academic and industry gaps, ensuring that their promotional efforts emphasize monitoring by Sharia committees. The research revealed significant impacts of factors on attitude, confirming H1, H3, H5 and H7. Importantly, attitude was found to play a pivotal role as a mediator between factors and Shariah scholars’ perceptions of Islamic banking in Pakistan. Research limitations/implications By investigating the perspectives of Shariah scholars, this research seeks to provide insights into enhancing the understanding and development of Islamic banking practices within the context of Islamic principles and global financial landscapes. Originality/value This research contributes to the field by uniquely focusing on Shariah scholars’ perceptions of Islamic banking, addressing a significant gap in literature because little research has been conducted to address these issues from the Shariah scholars’ perspectives.

Bank liquidity creation and solvency risk with moderating role of loan concentration: a comparative study of Islamic and conventional banks in Pakistan and Malaysia

Bank liquidity creation and solvency risk with moderating role of loan concentration: a comparative study of Islamic and conventional banks in Pakistan and Malaysia

Fintech and Economic Policy Uncertainty Integration: Driving Efficiency in Commercial Banks through the Lens of ARDL Approaches

The financial landscape of Pakistan is changing due to the increased accessibility, affordability, and security of FinTech services. This change is essential for raising the standard of living for Pakistan's economic prospects and certain contributing factors to FinTech. This paper investigates the symmetric and asymmetric relationship between Fintech and economic policy uncertainty, bank variability, and governance quality in commercial banks of Pakistan from 2014 to 2020, considering linearity and non-linearity in the data. The data has been converted to monthly frequency, and the Autoregressive distributed lag (ARDL) and nonlinear autoregressive distributed lag (N- ARDL) models have been applied to address long- and short-run associations. The study results reveal that EPU and bank variability have an asymmetric relationship with Fintech during the long run. In contrast, bank variability is connected during the long and short run. Furthermore, governance quality shows a symmetric relationship with Fintech in the long and short run. However, based on the findings of the error correction framework, there is no significant association in the long run. This paper concludes that Fintech, economic policy uncertainty, and bank variability have an asymmetric relationship, while GQ and Fintech are symmetrically associated. Moreover, it contributes to the existing literature by shedding light on the factors affecting Fintech services in commercial banks along with the financial and economic implications for investors, government, regulatory authorities, policymakers, and banks being institutional investors.

Debt trap dynamics: The moderating role of convenience, financial literacy, and religiosity in credit card usage

In the modern age, the card payment business has flourished in Pakistan. Many multinational and national commercial banks have not only introduced debit cards but also many types of credit cards with distinct payment plans, and they are broadly used as financial instruments in consumer financing. The purpose of this research is to identify the distinctive components that cause credit card debt and how Pakistanis are snared into a debt trap by using credit cards. For this purpose, the study examines the effects of credit card usage (CCU), materialism (M), installment plan (IP), convenience (CONV), religiosity (R), and financial literacy (FL) on a dependent variable, debt trap (DT). Furthermore, the moderation impacts of R, FL, and CONV are tested too. The quantitative research approach and cross-sectional research design were applied. The data was collected from 297 credit card users by using a convenience sampling technique that shows a 79.2 % response rate. The Partial Least Square (PLS)-Structural Equation Modeling (SEM) technique was employed for data analysis. The Partial Least Square (PLS)-Structural Equation Modeling (SEM) direct effect has shown that CCU, M, IP, CONV, and R have a significant relationship with DT while FL has an insignificant relationship with the DP. In other words, the indirect effect has shown that FL is not significantly moderate in the relationship between R and DT. Likely, CONV does not significantly moderate the relationship between CCU and DP, however; other indirect effects show a significant moderated relationship of all other independent and dependent variables. Most of the moderating effects are supported, therefore the moderating effects are significant contributions. The study findings could help banks and regulatory bodies in launching these types of credit cards which are under shariah complaints about captivating the users to use the credit card without any fear. This research is a pioneer study in the context of the Pakistan banking sector along with three moderators, religiosity, financial literacy, and convenience. Based on the findings of this research, policymakers and financial institutions in Pakistan should consider introducing Shariah-compliant credit cards that align with users' religious beliefs, while promoting financial literacy programs to better educate consumers on responsible credit card usage and debt management, thus preventing them from falling into debt traps.

The Effects of Green Practices on Economic Growth in Pakistan

Green practices play a key role in boosting the economic growth of a country. With the growing awareness and concern about environmental sustainability, the need of shifting towards a low-carbon economy and adoption of green practices has gained significant attention. The aim of this study is to analyze the effect of various green practices on economic growth in Pakistan. For this purpose, green banking, renewable energy, and foreign direct investment have been taken as the independent variables while economic growth has been taken as the dependent variable in this study. A mixed yet predominantly positive relationship between the variables was revealed by a comprehensive review of existing literature. This study is based on a quantitative research method along with a deductive approach that is supported by hypotheses that are tested with the help of the data gathered. Forty- two listed commercial banks in Pakistan that are subject to State Bank of Pakistan regulation make up the population. It also includes five percent of the energy mix which is consumed within Pakistan and is considered renewable energy and the data was gathered from the official website of NEPRA. The sampling data for foreign direct investment is gathered from the official site of the World Bank from the year 1999 to 2022. The sampling technique that is used in this study to collect data is convenience sampling. The number of samples taken for each variable was twenty-three and the software used to analyze data was Statistical Package for the Social Sciences (SPSS). The green banking has a strong positive effect on economic growth meanwhile; the renewable energy and foreign direct investment both have a direct but an insignificant effect on economic growth in Pakistan. Finally, this study could be beneficial for future researchers in the aspect to focusing on green practices and their implementation.

In the Shadow of Ethical Abyss: Unraveling the Threads of Unethical Leadership and Job Embeddedness in Pakistan's Banking Sector through Ostracism and Lifeline of Support

In the Shadow of Ethical Abyss: Unraveling the Threads of Unethical Leadership and Job Embeddedness in Pakistan's Banking Sector through Ostracism and Lifeline of Support

Evaluating the Influence of Basel Accord on Banking Sector of Pakistan

The papers aim to investigate how Basel III affected Pakistan's entire banking sector from 2013 to 2018. The requirements and obligations of Basel III are regarded as the most efficient tools for the banking sector. When analyzing the impact of Basel III on the banking industry, three primary considerations are made: financial size, spread, and provision for non-performing loans. Relapse investigations were utilized for checking speculation. We inferred that the general pummel of Basel III on banks is enormous, yet not all banks have totally taken on Basel III. The significance of this research lies in giving important experiences into the viability of global regulatory structures in rising economies' potential. By evaluating the Basel Accord's effect on Pakistan's banking sector, this study adds to a more extensive comprehension of how worldwide guidelines can be adjusted to neighborhood settings and how they can address explicit challenges faced by banks in emerging nations. This analysis not only reveals insight into the operational and vital changes made by Pakistani banks but also gives suggestions for policymakers to upgrade regulatory practices and monetary strength. Eventually, this research aims to illuminate future regulatory changes and work on the flexibility of Pakistan's banking sector in the face of worldwide monetary uncertainties. We propose highlighting semiannually the effects of Basel on the banking industry and conducting a comparison analysis of conventional and Islamic banks.

Decision-Making Framework for Improving Bank Performance in Emerging Markets: The Analysis of AHP-TOPSIS and AHP-GRA Models

Abstract This study utilizes the Analytic Hierarchy Process (AHP) in combination with the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) and Grey Relational Analysis (GRA) models to thoroughly assess the performance of banks in China, India, Pakistan, and Thailand. The integrated results offer significant insights into the relative rankings of various banks in each country. In China, Bank of China Ltd (BOC) emerges as the top performer, setting a benchmark for others. Similarly, in India, the State Bank of India is consistently identified as the leading bank. The National Bank of Pakistan stands out as the top performer in Pakistan. In Thailand, despite minor deviations in results, Kasikornbank PCL (KBANK) consistently shows strong performance. The alignment of results between AHP-TOPSIS and AHP-GRA underscores the reliability of both models, providing stakeholders and decision-makers with a comprehensive understanding of bank performance. This enables them to identify benchmarks, leverage strengths, and address areas for improvement within each country’s banking sector.

Exploring customer retention dynamics: A comparative investigation of factors affecting customer retention in the banking sector using mediation-moderation approach

The purpose of this research is to explore the impact of service quality, customer trust, and cultural disparities on customer satisfaction within the banking sector. Additionally, the study examined the mediating effect of customer satisfaction and the moderating effect of financial technology. Data for this investigation were gathered from customers utilizing services offered by public banks in Pakistan and China. The analysis was conducted using the Smart-PLS software, with 281 samples from Pakistan and 312 samples from China being included in the study. Results show that service quality, customer trust, and cultural differences positively affect customer satisfaction in the context of Pakistan and China. Results also reveal that service quality and customer trust have a positive effect on customer retention behavior in China, but customer trust has an insignificant impact on customer retention behavior in Pakistan. Analysis specifies that customer satisfaction positively mediated the relationship between service quality, customer trust, cultural differences, and customer retention behavior in Pakistan and China. More importantly, financial technology moderated the relationship between customer satisfaction and customer retention behavior, but it was insignificant in the context of China and Pakistan. The study seeks to provide significant insights for strategic decision-making and improve customer relationship management techniques in the dynamic field of financial services by including mediating and moderating elements.

Leveraging Banking Financial Performance through Shari’ah Board’s Characteristics: Empirical Investigation

This study examines the impact of board characteristics on the financial outcomes of Shari'ah-compliant banks in Pakistan, with a particular focus on supervisory attributes such as board size, frequency of meetings, and independence in decision-making. The empirical analysis utilizes data from all Islamic banks of Pakistan over the period from 2021 to 2023, a timeframe chosen to evaluate financial performance in the context of post-pandemic economic challenges. Employing panel data analysis through multiple regression models, the study reveals that bank size does not have a significant effect on the financial outcomes. In contrast, the board size plays a crucial role in influencing financial success. Specifically, boards that are composed of independent members that meet regularly for strategic evaluations tend to achieve better financial performance. These results emphasize the importance of enhancing Shari'ah-compliant governance structures, particularly in the context of economic recovery. The implications of these findings suggest that to improve the decision-making process, Islamic banks should focus on quality and independence in board composition and prioritize frequent strategic assessments to improve financial outcomes.

The Impact of Technostress on Rumination in the Banking Sector of Pakistan

Although Pakistan's banking industry is leading the way in digital transformation, a hidden techno-stress is associated with this advancement. Our research, created with your business goals in mind, looks at how work-life conflict, information overload, and other tech-related worries affect the dedication and well-being of employees. We look at how common techno-stress is and how it relates to depressive thoughts. We aim to provide workable solutions that lessen technology-related stress while promoting worker well-being and corporate efficiency. We examine the effects of various types of rumination on productivity using survey data. We suggest strategies that reduce harmful tech stresses and encourage healthy detachment to increase employee happiness and organizational efficiency. Using a strict approach, we examine the intricate links between technostress and associated aspects. This study highlights the need for context-specific solutions for Pakistan's banking industry and provides insightful advice on fostering a positive workplace culture that grows with technology.

The Impact of Green HRM Practices on Employee Performance: Mediating Role of Psychological Ownership in The Banking Sector of Pakistan

This paper investigates the mediating role of psychological ownership in the association between green human resource management and employee performance. The study utilized a quantitative research design based on data analysis of 980 employees from 20 commercial banks in Pakistan. Psychological ownership mediates the association between green human resource management practices and employee performance. The paper highlights the significance of green human resource management practices in fostering psychological ownership and enhancing employee performance in the workplace. For future studies, longitudinal designs with multiple sources and stages of data collection will be essential to gain a profound understanding of the relationship between the constructs. Testing across various organizational forms and cultures is recommended for a comprehensive assessment. Managers are encouraged to raise employee awareness through green human resource management practices to help employees attain a competitive edge by enriching their knowledge, skills, and abilities, enhancing their quality of life and work performance. This study contributes to the existing literature by offering a descriptive and practical elucidation of the role of psychological ownership among the employees of the banking sector in Pakistan in the connection between green human resource management practices and employee performance. The banks must recruit those individuals who have the knowledge and work for a sustainable environment, and they own their position at the workplace.

Comparative analysis of FinTech adoption among Islamic and conventional banking users with moderating effect of education level: A UTAUT2 perspective

This study aims to examine the consumer behavior with regards to the FinTech services in the context of Pakistan and identify the consumers’ driver and detractors to adopt FinTech firm. Tapping into an area yet un-explored, it seeks to propose a conceptual framework based on the UTAUT2 model and extend the FinTech adoption model by determining the effect of performance expectancy and effort expectancy based on educational segmentation. In a similar vein, it aims at examining the gaps in the adoption of FinTech services in both Islamic banking as well as the conventional competing banks of Pakistan. This paper employed a quantitative research design; data were collected from 382 subjects in Karachi, Pakistan Convenience sampling and random number generation were employed to minimize biased. This study sought participants’ responses to the survey questionnaire of 22 items, distinguishing the seven constructs of the UTAUT2 and a new one, education level, on a five-point Likert scale. Concerning the sample size and the research methods that were used, the rationale was given in line with the available guidelines and the results of empirical research in the field of behavioral sciences. As the research hypothesis postulated, the study revealed performance expectancy, effort expectancy, social influence, and facilitating conditions as independent factors influencing behavioral intention to use FinTech, although the moderating effect of education level only affected the relationship between the performance expectancy and behavioral intention to use FinTech influenced by it. They also found differences between Islamic and conventional banking users, and the enhancing/attenuating impacts of the constructs on the behavioral intention alertly. This research underscores the essential factors that influence the behavioral intention of the users towards FinTech services – performance expectancy, effort expectancy, social influence, and facilitating conditions – with implications for promoting positive service experiences. Financial technology firms must heed these insights to create simple and secure applications to increase the adoption of FinTech innovations that are sensitive to the anglophone African cultures. Besides, the focus on deploying rather diverse local initiatives for comprehending and constantly improving the FinTech services based on people’s feedback can increase consumers’ trust and expectations.

Barriers to digital financial inclusion and digital financial services (DFS) in Pakistan: a phenomenological approach

Purpose Financial inclusion plays an essential role in today’s modern era. There has been a growing recognition that financial inclusion is an important enabler in poverty reduction. It is an essential tool in enabling inclusive growth and reducing poverty. This study aims to identify the barriers that limit customers to use digital financial services (DFS) in Pakistan. Second, this study aims to spread awareness of DFS and benefits of digital financial inclusion and services to retain customers in Pakistan. Third, the study purposes to retain old customers toward DFS in Pakistan. Design/methodology/approach This study is qualitative phenomenology study. The data were collected through interviews (i.e., online or face-to-face, depending on participants convenience). The sample comprised respondents with different age and different nature of work. Before conducting actual interviews, the interview questions were validated by three experts working in the State Bank of Pakistan in the relevant field. The interviews took from those individuals who were have digital financial account, but not using it due to some reasons. Data analysis carried out by using the NVivo software to deliver the themes after analyzing the data by querying, visualizing and coding. Findings The study categorized s6 themes as second order themes including dependency, illiteracy, lack of trust, cost, lack of access to financial services and financial instability by emerging 16 subject themes as 1st order themes. It including financial illiteracy, digital illiteracy, lack of knowledge, depend on spouse, depend on parents/children, depend on siblings, fear, security issues, privacy issues, lack of internet access, lack of account access, unemployment, low income, high expenses, other cost and transaction cost. These barriers limit DFS adoption and its use. This study found that 90% respondents were financial illiterate and 80% respondents do not have the knowledge of new recent e-payment system. Originality/value However, this study contributes to reducing these barriers and spreading knowledge about financial inclusion and DFS. From a managerial perspective, additional attention needs to be devoted to the adoption of financial inclusion and innovation in DFS.

Impact of Individual and Innovative Differences on Customer Value Co Creation with Self Service Banks in Pakistan: The Mediating Effect of Trust

Purpose: The major aim of the study is to examine the banks’ differences and innovative features of digital banking services in terms of customer trust and belief with benevolence, integrity, and competence dimensions that will impact on customer value and co-creation behavior. Design/Methodology/Approach: The conceptual framework is based on different theories like the reasoned action theory, the planned behavior theory, the diffusion of innovation theory, the unified theory of acceptance and use of technology, performance expectancy, effort expectancy, social influence, and facilitating conditions. In this study, quantitative methods were used and questionnaires were filled for data collection. By using structural equation modeling hypotheses are tested and Confirmatory factor analysis is used to assess the model fitness and the dependability and efficacy of the data. Findings: There are three take aways from the results. First, individual differences lead to the trust of customers in customer value co-creation. Second, innovative features impact the trust of the customer in the usage of self-service banking. Third, banks’ differences and innovative features of digital banking services in terms of customer trust and belief impact Customer value and co-creation behavior. Implications/Originality/Value: This study appraised the individual and innovative differences on customer value co-creation with self-service banks in Pakistan: the mediating effect of trust that has never been examined in the existing literature.

Leadership Styles and Relationship Conflict in Pakistani Banks: Exploring the Moderating Roles of Trust, Emotion, and Clarity

This study aims to explore the moderating impacts of cognitive trust, emotion regulation, and role clarity on the relationship between different leadership styles—transformational, transactional, and laissez-faire—and relationship conflict within the Pakistani banking sector. The objective is to understand how these moderating variables influence the dynamics between leadership approaches and interpersonal conflicts in a high-stress, compliance-driven environment. A quantitative research design was employed, targeting non-managerial staff across five major private banks in Pakistan. Data were collected through a self-administered survey using both digital and printed questionnaires. The survey assessed various constructs, including leadership styles, relationship conflict, cognitive trust, emotion regulation, and role clarity. SmartPLS 4 software was used to evaluate the measurement model and to test the hypothesized interactions between the variables. The analysis revealed that cognitive trust significantly moderated the relationship between transformational leadership and relationship conflict, suggesting that higher levels of trust can reduce conflicts in transformational leadership contexts. However, cognitive trust did not significantly moderate the effects of transactional and laissez-faire leadership on relationship conflict. Role clarity was found to be a critical moderating factor, effectively reducing relationship conflict across all three leadership styles, indicating its importance in providing clear expectations and reducing ambiguity in the workplace. Emotion regulation also played a significant moderating role in both transformational and transactional leadership, helping to mitigate relationship conflicts. However, it did not significantly moderate the relationship between laissez-faire leadership and relationship conflict. The findings underscore the importance of fostering cognitive trust, enhancing emotion regulation skills, and ensuring role clarity in organizational settings, particularly within the banking sector. By focusing on these moderating factors, organizations can better manage the adverse effects of different leadership styles on relationship conflicts, thereby improving overall team cohesion and productivity. This study provides valuable insights into the complex interplay between leadership styles and relationship conflict in a culturally specific context. It highlights the critical roles of cognitive trust, emotion regulation, and role clarity as moderating factors that can enhance leadership effectiveness and conflict management in the Pakistani banking sector.

Financial Hindrances to Growth: Understanding Profitability Issues in Pakistan’s Islamic Banking Sector

Purpose: The study aims to examine the banks internal factors influencing the profitability of Islamic banks in Pakistan, focusing on dimensions such as quick ratio, cash deposit ratio, capital adequacy, and bank size. Design/Methodology/Approach: A Secondary data collection method has been used in this quantitative nature of study. Using quantitative analysis with Stata software, this study analyzes data from 2015 to 2023 sourced from Islamic banks' official websites. Findings: Analysis of the study reveals that capital adequacy, bank size, and quick ratio are the factors that significantly affect Islamic bank profitability, while the cash deposit ratio shows a no significant impact. Implications/Originality/Value: By identifying critical profitability drivers, this research offers actionable insights for policy formulation and regulatory reforms, strategic planning for banks, operational efficiency, financial inclusivity, and investment attraction.

Determinants of Bank’s Financial Stability in Pakistan

The purpose of this study is to investigate the role of both internal and external factors in achieving better stability in context of Pakistani banking industry. The internal determinants that this research study have used are bank size, funding risk, liquidity risk, credit risk and return on assets while external variables utilized includes money supply and unemployment rate. The study contains 10 years secondary data over the period 2013-2022 of 24 commercial banks of Pakistan. This study conducted correlation analysis and GMM model estimation for analysis. The findings show that liquidity risk, bank profitability, funding risk and bank size have positive and significant impact on bank stability. On the other hand, credit risk effects negatively bank stability. The result showed that money supply positively affects the stability of banks in Pakistan. On the contrary, unemployment is negatively affecting banks stability. The findings of this study have important implications for policymakers, regulators, banks, investors, and other stakeholders in the Pakistani banking sector. By enhancing the understanding of the factors influencing bank stability, the research contributes to identifying the importance of development of evidence-based policies, risk management strategies, and regulatory reforms aimed at development of a stable and resilient banking system in Pakistan.

The Contribution of Islamic Banks L/C Financing and Exchange Rates Towards Pakistan's Exports Between 2010 and 2022

This study to examines the factors that can affect the Exports of Pakistan, by paying particular attention to letter of credit financing of Islamic banks in Pakistan and exchange rate. Sample data of Islamic listed Banks is selected from last twelve years i.e., 2010 to 2022 with 975 observations. Study measure exports performance using exports figures of Pakistan as the proxy for Export performance while external factors namely letter of credit financing of Islamic banks and exchange rate used as an influencing factor. Applying panel analysis, the results provide positive association Pakistan’s Export with Islamic banks letter of credit financing and exchange rate, indicating that easy availability of letter of credit financing and favorable exchange rate can help increase Pakistan’s exports. The study's findings can aid policy managers, particularly those hoping to boost exports and foreign exchange through them, as well as managers seeking to broaden their knowledge of the key elements influencing export performance

Digital Transformation and Work Stress Impact on Employee Engagement in the Private Banking Sector

Digital transformation has been a significant topic of discussion in Pakistan's banking industry. High levels of stress in the workplace might be caused by the introduction of various uncertainties due to technological advancements. Work-related stress can directly impact employees' engagement in their work, jeopardizing the organization's effectiveness. The study took place in a private bank in Indonesia, involving 448 participants located in Jakarta. These responders have witnessed significant technological advancements during the past year. This work utilizes a quantitative approach, specifically employing the Structural Equation Modelling Partial Least Squares (SEM PLS) method. Furthermore, 25 indicators from several worldwide publications are utilized. The study's findings demonstrated that the 25 indicators were able to form each of the latent variables. The research indicated that workplace stress had a negative impact on employee engagement. Therefore, it was suggested to conduct further research on the issues identified in the findings.