Banks In Pakistan Research Articles

The impact of efficient training and development on employee job satisfaction

Training and development have a significant impact on employee job satisfaction. This paper's main objective was to investigate whether training and development impact employees' job satisfaction in the banking sector of Pakistan. The paper is quantitative. Data for the paper has been collected through primary sources, such as questionnaires and surveys. The data have been checked through statistical software to find the impact of training and development on employees' job satisfaction. Training and Development (independent) and Employees' Job satisfaction (dependent) were two variables. To investigate whether training and development impact employees' job satisfaction in the banking sector of Pakistan, five branches of the National Bank of Pakistan (NBP) from the Karachi region were selected for the study. Eighty questionnaires were distributed for the collection of data. Descriptive statistics tools in SPSS were applied to the questionnaire to see its reliability and consistency. The goal was to see whether training and development impact employees' job satisfaction. The data were analysed and discussed. The result showed a significant relationship between the variables; Pearson correlation was used in the study, and Cronbach's alpha for each questionnaire was obtained. The frequency distribution was used to see the individual results of the study. Relevant literature was also studied about topics related to this research. Recommendations and conclusions form the last part of this paper.

Mediating role of wellbeing among organizational virtuousness, emotional intelligence and job performance in post-pandemic COVID-19.

It is devastating to people's mental and emotional health to be exposed to the COVID-19 pandemic and the multifaceted response strategies are required to curb it. As a result of social distancing and self-isolation, people have faced many challenges in their lives. The suffering is even greater at the workplace where the employees are working with the fear of getting exposed to the virus and its new variants which is adversely affecting their wellbeing. This study explores and tests a model that extends the wellbeing research across organizational settings and targets the crucial factors that lead to job performance improvement even in the post pandemic COVID-19 situation. To improve both in-role performance and extra-role performance behaviors in the Pakistan banking sector, organizational virtue (also known as organizational virtuousness) and internal virtue (also known as emotional intelligence) are examined. Data were collected from the 416 bank employees using disproportionate stratified sampling technique. In the bank sector of Pakistan, wellbeing was identified as the key psychological factor that relates the in-role performance and extra-role performance to internal and organizational factors. Research findings also determined that conceptualizing subjective wellbeing in the context of work is more meaningful in understanding its relationship with the workplace variables than the general or global subjective wellbeing.

Corporate income tax, asset turnover and Tobin’s Q as firm performance in Pakistan: Moderating role of liquidity ratio

This article finds the impact of corporate income tax and asset turnover on financial performance of the corporate sector with panel data in Pakistan. Panel data of sixteen non-financial firms listed in Pakistan Stock Exchange during the time period from 2006 to 2021 are used for analysis. Panel data are collected from the Data Services & Innovations Department, State Bank of Pakistan (SBP). The fixed effect model (FEM) estimates are found more appropriate for estimation on the basis of Hausman test. The study utilizes Tobin q as an indicator of firm financial performance. Findings of study explain that corporate income tax effects firm financial performance positively. However, this impact is not significant. Further, the impact of asset turnover is negative and significant. Negative relation is found between liquidity ratio and firm financial performance. It indicates that a lesser amount of liquid assets evade from expensive borrowing. Tax structure is important for firm financial growth and performance. The improvements in corporate tax structure to boost the investment in the corporate sector of Pakistan are recommended. Further, sales of Pakistani firms do not meet the neck and neck of firm’s assets. Firm is advised to improve product quality for its sale promotion and government can play its role in this regard by devising export policy.

Islamic finance education: Current state and challenges for Pakistan

Islam stipulates its adherents to abide by religious principles in their economic transactions. The aim of this study is twofold. First, it accounts for the adherence of Shariah board members of Islamic banks with the Fit and Proper Criteria (FAPC) promulgated by State Bank of Pakistan (SBP). Second, it explores the current state of provision of Islamic finance education in the universities and madaris (i.e., Islamic seminaries) in Pakistan. This is the unique study in a sense because it draws attention of the stakeholders concerned (i.e., SBP, Higher Education Commission, Ittehad-e-Tanzimat Madaris-e-Deeniya & Ministry of Education) to revisit and make strategic milestones in congruent with the demand-supply gap of Islamic professional experts. Total sample consists of 21 banks, out of which the first five are full-fledged Islamic and remaining 16 are the commercial banks with Islamic banking branches. Descriptive research design has been employed to examine the supply of Shariah experts from madaris and universities in Pakistan. Our findings reveal the following: (1) Profiles of all the Shariah board members fully comply with the FAPC of SBP, and more than 50% of members represent multiple boards of Islamic banks. (2) With 26,000 madaris across Pakistan, 75% of the Shariah experts received their education from one Madrisa named Jamia-dar-ul-uloom, Karachi. Notably, province-wise stats highlight Punjab atop in terms of madaris (45% to 56%) in the country, though it produces less than 10% scholars for the Islamic banks’ Shariah boards. A similar situation persists in Khyber Pakhtunkhwa that has 1354 to 3136 madaris and only one Shariah scholar received education from this province. Karachi, the capital of Sindh province and hub of Islamic seminaries, solely contributed more than 85% SB members to the Islamic banks. (3) Among the top fifteen business schools of Pakistan, only four are offering a degree in Islamic finance. Moreover, these four schools have only eight full-time faculty members with a core degree in Islamic finance. This study suggests the practitioners to increase the supply of Shariah scholars and also strengthen the capabilities and skills of human capital regarding Islamic finance education through education, training, social awareness and capacity building.

The Nexus between Environmental Corporate Social Responsibility Disclosure and Firm Performance in Pakistan

The corporate social responsibility (CS_R) is considered a key factor in the realm of finance and is regarded as an important aspect of investment decision-making. This research aims to look into the impact of the environmental dimension of CS_R disclosure on firm financial performance (F-P) in the Banking sector of Pakistan. This study utilizes secondary quantitative data gathered from published annual reports of publicly traded banks and the official website of the Pakistan Stock Exchange (PSX) from 2010 to 2020. The study applied the fixed effect model (F-E-M) or a random effect model (R-E-M) for analysis purposes, along with some pre-requisite diagnostic tests. The independent variable of the study is the environmental dimension of CS_R, while the dependent variable of the study is firm F-P proxied by return on assets (R-O-A) and return on equity (R-O-E) respectively. Control factors such as business size and debt ratio were also employed in the study. The outcome of the study showed that there is a significant relationship between environmental CS_R and F-P in Pakistan's banking industry. This particular research assists companies in understanding the significance of CS_R disclosure in improving the financial performance of the banking industry. The study's conclusions should have practical applications for firms, governments, financial advisors, and Pakistan's banking industry.

Inclusive leadership and turnover intention: the role of follower–leader goal congruence and organizational commitment

PurposeUsing a dual-lens of leader–member exchange (LMX) and social exchange theory (SET), this study aims to propose a conceptual model that explores the nexus between inclusive leadership and turnover intention as mediated by follower–leader goal congruence and organizational commitment.Design/methodology/approachData were collected via a survey questionnaire from a sample of 322 front line employees working in different banks in Pakistan. The structural equational modeling (SEM) technique was used for hypotheses testing.FindingsFindings of the study show that inclusive leadership has a positive influence on follower–leader goal congruence which in turn has a positive influence on organizational commitment. Further, organizational commitment has a negative influence on turnover intention. Additionally, the results lend support to the mediating effects of follower–leader goal congruence on the relationship between inclusive leadership and organizational commitment, and the mediating effect of organizational commitment on the relationship between follower–leader goal congruence and turnover intention.Research limitations/implicationsThis research extends the literature on inclusive leadership, follower–leader goal congruence, organizational commitment and turnover intention. This study focuses on the follower–leader centric approach.Practical implicationsThe findings of this study can guide policymakers and management of the banking industry to develop the inclusive leadership qualities of existing managers to reduce the turnover intention of their employees.Originality/valueBy incorporating LMX and SET, this study tests a model that demonstrates the mediating role of follower–leader goal congruence and organizational commitment in the relationship between inclusive leadership and employees’ turnover intention.

Shariah capabilities and value propositions of Islamic banking

PurposeThe purpose of this paper is to explore the types of Shariah capabilities of Islamic banks, which provide bases for the types of Shariah value propositions, offered by the relationship managers in their front-line service experiences with the customers.Design/methodology/approachA resource-based view of Shariah capabilities and a service-dominant logic view of value propositions are adopted. Fifteen relationship managers from multiple Islamic banks in Pakistan are interviewed to find a typology of Shariah capabilities and a resultant typology of value propositions for Islamic banks.FindingsThe findings suggest that Islamic banks claim to possess five types of Shariah capabilities, namely, Shariah governance capability (SGC), Shariah compliance capability (SCC), Shariah monitoring capability (SMC), Shariah structuring (product) capability (SSC) and Shariah learning capability (SLC). These capabilities lead to four types of values propositions, namely, Shariah identity value (SIV), Riba-free value (RFV), Shariah disclosure value (SDV) and Tangibility value (TV) of the real assets in transactions.Research limitations/implicationsThe study has relied on the front-line experiences of relationship managers who are connected to the Islamic banks’ capabilities inside the banks and the value propositions that they offer to show relationships with customers in front-line service experiences. Other stakeholders may have different perspectives on both capabilities and value propositions.Originality/valueThis paper contributes to Islamic finance theory by theoretically and empirically showing two typologies for the Islamic banks' capabilities and value propositions, respectively.

Когда сотрудники становятся агентами изменений: развертывание механизма, способствующего поведению, поддерживающему организационные изменения

Purpose. Organizational change does not always have just negative repercussions but alsohave positive implications. Drawing on job demands-resources (JD-R) model, this study aims to examinethe effects of empowering leadership on employees’ change supportive behavior through job crafting behavior, a relationship that is moderated by hope. Study design. Data was collected from bank staffof one of the leading banks in Pakistan that is going through major techno-structural change by crosssectional means. We distributed 342 questionnaires and collected 211 in return; the final sample size was 203. In corresponding sample, 84% of the respondents were male; about 47% of them found inage between 26–35 years old, while 34% had experience of 5–10 years comprising the highest bracket.The questionnaire comprised of multi-dimensional facets of empowering leadership and job crafting, and one-dimensional aspect of hope and change supportive behavior. PLS-SEM approach was opted tomake inferences and estimations of the proposed model. Findings. Consistent with our expectations, the result shows that empowering leadership positively predicts employees’ change supportive behavior. Italso reveals that the relationship between empowering leadership and change supportive behavior is mediated by job crafting. Furthermore, hope moderates the relationship between empowering leadershipand job crafting. Value of the results. The study offers fresh theoretical, empirical, and practical insights into the existing body of change literature. It contributes to the research on organizational change by addressing multiple perspectives in a single study by simultaneously examining the person and context factors and activation phenomenon to unfold one’s behavioral support for change.

Evaluating the Impact of Bank Distress on the Financial Performance of Commercial vs Islamic Banks in Pakistan

Evaluating the Impact of Bank Distress on the Financial Performance of Commercial vs Islamic Banks in Pakistan

AN EXPLORATORY STUDY ON THE PERCEPTION, CHALLENGES, AND STRATEGIES FOR AGRICULTURE FINANCING IN PAKISTAN: STAKEHOLDER’S PERSPECTIVE

Agri-financing faces challenges due to a variety of factors that are still uncovered in the context of developing countries. This study aims to explore the challenges from the perspective of stakeholders specifically bankers, farmers, and regulators to boost agriculture financing by channelizing it through commercial banks in Pakistan. The study used interviews through open-ended semi-structured questions from stakeholders. The study capitalizes on the purposive sampling technique for conducting interviews with the 16 conventional and Islamic Agri-bankers. A stratified random sampling design is used to conduct interviews with 30 farmers from the Potohar region. The study used ATLAS. ti version, 8 for thematic analysis of qualitative data. The study finds that the bankers and farmers weigh the challenges such as high-interest rates charged, lengthy and cumbersome documentation, collateral requirements by commercial banks, and socio-demographic factors of farmers (illiteracy, religiosity, poor communication skills) and exploitative role of middlemen (Aarthies). Moreover, a lack of awareness for the use of innovative ways to improve productivity by farmers inhibits the agri-equipment financing from banks. Stakeholders suggest that introducing customized regional farmers’ financial literacy programs and platforms for linking farmers with value-added companies, centralized farmers' data portal (landholding/record-keeping system) and digitalization of agriculture loan processes (one window operations) can improve the agri-financing situation in Pakistan. This study has significant implications for the policymakers of the agricultural sector to incentivize farmers and provide strategies to overcome the challenges for facilitating stakeholders in Pakistan.

Determining Risk Factors that Diminish Asset Quality of Commercial Banks in Pakistan

Determining Risk Factors that Diminish Asset Quality of Commercial Banks in Pakistan

THE PRACTICES OF RUNNING MUSHARAKAH BY ISLAMIC FINANCIAL INSTITUTIONS: THE SHARIAH ANALYSIS

Running Musharakah (RM) is a type of financing in which an Islamic bank becomes a sleeping partner in a client’s business through a contractual partnership (shirkat-ul-'aqd). Islamic banks set a limit on how much money a client can withdraw immediately or on an “as and when needed” basis. It is now widely used by Islamic banks in Pakistan, who claim it to be a shariah-compliant product and an ideal mode of financing for Islamic financial institutions. However, the opponents claim that the RM product is not Shariah-compliant. There have been numerous scholarly discussions and criticisms of Running Musharkah’s products and practices. As a result, this study examines Running Musharkah (RM) as practiced in Pakistani Islamic banks to determine its Shariah permissibility or impermissibility. The study delves into the history, legitimacy, and rationale for introducing RM alongside financing arrangements used by Islamic banks, and enumerating the dubious points of RM as a shariah-compliant product through a qualitative research approach. The article primarily analyzes the background, legitimacy, and rationale for introducing RM as a Shariah-compliant product through a qualitative research approach, and the dubious points of RM as a Shariah-compliant product. Keywords: Running Musharkah, Running Finance, Shariah, Islamic Banking DOI： https://doi.org/10.35741/issn.0258-2724.58.1.51

Impact of Islamic Corporate Governance on Sustainability Performance in Islamic Banks of Pakistan: Moderating Role of Insider Ownership and Institutional Ownership

This study aims to investigate the impact of Islamic Corporate Governance (ICG) on Social Sustainability Performance (SP) in Islamic Banks of Pakistan, focusing on the moderating role of insider and institutional ownership. The study derives influential Islamic CG mechanisms from the theoretical perspectives of Agency Theory, Institutional Theory, and Legitimacy Theory, primarily focusing on Shariah board attributes and ownership structure. The study uses the Ordinary Least Square (OLS) for regression analysis and proposes three propositions to enhance social sustainability performance through responsible decision-making. The study results reveal that Islamic corporate governance significantly influences social sustainability performance, with Shariah board independence having a positive impact while size, competence, and process have a negative impact. The ownership structure of Islamic banks in Pakistan also significantly moderates the relationship between Islamic corporate governance and social sustainability performance, with insider ownership and institutional ownership playing a significant role. This study provides policy insights for policymakers, practitioners, and corporate boards to promote sustainablen operations through Islamic corporate governance, adding to existing developmental plans to address sustainability-related issues. This study also contributes to the literature by establishing the nexus between Islamic corporate governance and triple-bottom-line performance in IBs.

Determinants of Credit Risk and Operational Risk in Banking Sector Evidence from Pakistani Banking Sector

Risk management is what kind of strategies should be adopted to reduce all kinds of risk. Risk the difference between the actual return and the expected return. And credit risks the potential that borrower will fail to meet the obligation. The banking industry of Pakistan is faced with several challenges among them are determinants of credit risk and operational risk. Determinants of credit risk are defined as the factors that may affect the credit risk and determinants of operational risk are defined as the factors that affect the operation of business. Many banks in Pakistan have created credit risk management departments that are responsible for managing the credit risk associated with banking operation. The objective of this study is to evaluate the determinants of credit risk in Pakistani banking sector. The collected data consists of secondary data. Financial data was collected from three banks of Pakistan listed at Karachi stock exchange (KSE) over the period of 17 years from 2000 to 2016. Panel Regression Model was applied to find the cause and effect relationship for the under-consideration issue. The result has shown that credit risk and operational risk have a significant and positive relationship with NPLs, Gearing Ratio, and Operating Efficiency. And Credit Risk and operational risk have positive but insignificant relationship with Liquid Assets (LA). The recommendation of this study is if we pursue proper bank regulations, then the regulation should be backed up by sound credit analysis, and provision for suitable situation of credit loans.

Impact of Bank-Specific and Macro Economics Variables on Capital Adequacy Ratio (CAR) in the Private Banks of Pakistan

Impact of Bank-Specific and Macro Economics Variables on Capital Adequacy Ratio (CAR) in the Private Banks of Pakistan

Revisiting the Conceptual and the Operational Frameworks for Sharı̄’ah Governance of the Islamic Banks

Islamic finance has been facing serious challenges both in terms of credibility as a divine and value-based system and sustainability. Many authors and research institutions have been indicating the issues and suggesting reforms for some years, but one major area that could not get due attention regarding the reform agenda is the Sharı̄’ah governance system and integrating the sustainability framework into the governance related regulations. Another staggering point is that Islamic finance is moving on the path of convergence with conventional finance. It requires well thought-out conceptual and operational frameworks of governance for Islamic Financial Institutions so that the requisite regulations could be introduced and effectively implemented to keep Islamic financial services distinct from conventional services. To suggest such frameworks, this qualitative study analyses the Sharı̄’ah Governance Framework introduced by the State Bank of Pakistan in 2015, and the governance related published material. It can be termed as a case study on Islamic banks’ Sharı̄’ah governance framework and is based on structured interviews with 32 research participants including banks’ Sharı̄’ah board members, Sharı̄’ah reviewers/auditors, experienced Islamic banking practitioners, and the researchers/academics. As a case study, it is based on five research questions and many sub-questions relating to the governance framework introduced by the State Bank of Pakistan in 2015 for Islamic banking institutions in Pakistan. Based on the findings of the study, it suggests the bases, processes, and measures for the Islamic banks and other financial institutions moving to Islamic social finance and integrating it to the sustainability framework. It assigns roles to the regulators, the banks’ Sharı̄’ah boards, BODs, and senior management, and the operations and audit staff. It could become a basis for reforms in the whole process of product development and implementation and conducting business by Islamic banking and finance institutions to realize the objectives of Islamic finance as a divine, just, and value-based system.

Funding Liquidity and Risk-Taking: Evidence from the Commercial Banks of Pakistan

Funding Liquidity and Risk-Taking: Evidence from the Commercial Banks of Pakistan

Household Inflation Expectations Uncertainty: A Case for Pakistan

This study examines the uncertainty of consumer inf lation expectations in Pakistan using the data collected by the State Bank of Pakistan (SBP) through the Consumer Confidence Survey (CCS). CCS has been conducted every second month since January 2012. The research employs round numbers to calculate inflati on expectation uncertainty and finds it countercyclical and positively correlated with inflation. Further, it also displays a weakly positive correlation with inflation disagreement, inflation volatility, and the Economic Policy Uncertainty (EPU) index. Th e study also reveals that inflation expectation uncertainty is higher for female, less educated, and young respondents compared to businessmen, males, older people, and educated. The study suggests asymmetric behavior of inflation expectations uncertainty for high and low inflation levels, where uncertainty is high when inflation is high. The study also suggests that inflation uncertainty is significantly related to food inflation. Lastly, the study establishes that inflation expectation uncertainty affects the consumption of durable goods by influencing consumer spending attitudes.

The Effect of Credit, and Liquidity Risk, along with Capital Adequacy and Audit Quality on Bank's Financial Stability: a Comparative Study between Islamic and Conventional Banks of Pakistan

The Effect of Credit, and Liquidity Risk, along with Capital Adequacy and Audit Quality on Bank's Financial Stability: a Comparative Study between Islamic and Conventional Banks of Pakistan

Analysis on Regional Guidance Mechanism for Promoting Prevention Based on Combination of Traditional Chinese Medicine and Western Medicine

This research empirically explores the aspects that define the dividend payout results among banks. The aim of this research is calculate the existence of relationship between dividends of banking sectors in Pakistan. This study considers the impact of four variables, namely, earning per share, capital ratio, size and cash flow per share on the dividend payout ratios by using unbalanced panel data set of fifteen listed banks. Secondary data was used under analysis and data was retrieved from the financial statement analysis banking sector listed in the Pakistan Stock Exchange (PSX) published by State bank of Pakistan. Secondary data was tested through E-views software version 9 with the descriptive analysis, unit root test, correlation, Hausman test and regression. Empirical results show that dividend payout policies are positively affected by the earning per share and cash flow but are negatively affected by the capital ratio and size of the banks. The results obtained also indicate that firms pay dividends with the intention of the reducing agency conflicts.