Bank Behavior Research Articles

Customers’ Satisfaction On Digital Banking System With Reference To Select Public Sector Banks In Karnataka

Digital banking is one of the most significant innovations in the banking industry that has been around for a long time. While there are many benefits that consumers get from using online banking, there are also some major challenges and challenges that marketers in the online banking industry face. The main challenges that internet banking marketers need to overcome in order to succeed in this industry are low marketing budgets, traditional bank behavior, security, technological issues, and transaction issues. As the years have passed by, digital banking has become more and more popular in the banking industry. Nowadays, the concept of digital banking is accepted in the world and it has gained popularity as a way of doing business. The unstoppable power of digital technology is transforming the financial services industry. This study seeks to identify the differences in problems faced by clients of different public sector banks when using digital banking services. 600 participants were randomly selected from those who had access to digital banking in Karnataka, and the primary data collected through a questionnaire was used as the basis for the analysis. The data was then interpreted using Statistical Processes Statistics (SPSS) and chi-square analysis, as well as a t-test.

Quantitative Easing’s Effects on the U.S. Housing Market

As the housing bubble burst in the United States, the buildup of subprime lending led to the Global Financial Crisis. The Federal Reserve desperately slashes interest rates to reverse the economic recession, but the Zero Lower Bound significantly hindered the policy's future effectiveness with concerns of an existing liquidity trap. As a result, the unprecedented Quantitative Easing became the policymakers' last resort. Through the large-scale purchases of financial assets including mortgage-backed securities (MBS) and government bonds, the Fed attempts to stimulate the economy through reserve creation and instilling downward pressure on future interest rates. This literature review discusses how QE specifically affected the U.S. housing market during the GFC. An analysis is conducted on various social aspects and stakeholders by identifying the various channels through which QE is transmitted. The signaling, bank lending, and refinancing channels all suggest that MBS had the greatest effect on market expectations, bank behaviors, and consumer spending. As a result, many were many spillover effects into real estate, notably on asset prices, employment, and investment. Even though literature has criticized QE's ineffectiveness and its potential drawbacks, the unconventional monetary policy certainly played an essential role in preventing a worse outcome and effectively demonstrating its ability to reduce interest rates, generate wealth, and revive the economy.

State-owned banks and international shock transmission

This study re-examines the relationship between commercial bank ownership and lending growth from 1996–2019. The results show that before the 2008 financial crisis, both categories of foreign banks expanded lending, predominantly in developing countries. A shift occurred in the lending behavior of foreign banks post-2008. Bank-specific characteristics became more influential in determining credit growth. During host country banking crises, foreign state-controlled banks demonstrated higher loan growth rates than private-owned banks and reduced credit growth abroad during banking crises in home countries. Lastly, during the 2008 crisis, domestic state-controlled banks stabilized lending activity, while both types of foreign banks reduced lending.

Bank Deposits as Money Quanta

According to the Accounting View of Money (AVM), the money issued by commercial banks in the form of demand deposits features a hybrid nature, since deposits can be shown to consist of a share of deposits bearing the characteristics of debt (debt-deposits) and a share of deposits bearing the characteristics of equity (equity-deposits), in a mix that depends on factors that relate to the issuing banks and the environment where they operate and interact, which may change over time. Following this important finding of the AVM, it is only consequential to associate the hybrid nature of bank deposits with the dual nature of the objects which is typical in quantum physics, and to investigate whether and how the application of quantum analytical methods and ideas to a form of money showing dualistic features could be used to extract valuable economic information. This article studies demand deposits (which represents the prevailing form of money in all contemporary economies) as a possible form of “money quanta”, that is, quantities reflecting some aspects tipical of quantum physics, and analyzes it using a quantum model to describe some relevant aspects of it, including for instance how banks’ power to create money (i.e., issue deposits typically via the credit channel) is affected by the interactions taking place between the banks and between the banks and their environments, and how system efficiency and stability change in relation to changes in bank behaviors. This article lays the foundations of money quanta and is the first step towards a better understanding of the relevance of quantum mechanical tools and ideas in connection with the study of economics and finance.

Islamic banks and capital buffer behavior: A view from the Gulf cooperation council markets

This study explores the determinants of the capital buffer behavior (CB) of Islamic banks (IBs) using a sample of 42 IBs in the Gulf Cooperation Council (GCC) markets during 2009–2018. We also investigate the transmission mechanism, efficacy of the macroprudential policies, relationships between these policies, and financial stability of these banks. Unlike previous research, this study considers certain peculiarities of IBs, including the effects of profit–loss-sharing investment accounts (PSIAs); the impact of capital adjustment costs; external factors such as market power and competition; and institutional influences such as the rule of law and the potential corruption perceptions index. Overall, our results show that CB is countercyclical, which is in line with Basel III requirements. Furthermore, CB is positively affected by bank size, level of profitability, and competition and negatively impacted by nonperforming loans, credit risk, and displaced commercial risk (DCR). The regulatory determinants are important as well, suggesting that strengthening the official macroprudential supervision encourages banks to strengthen their CBs. Conversely, although banks have adequate capital, regulatory tools increase the burden, increasing banks' capital costs and forcing them to limit risk-weighted asset expansion and credit growth. Furthermore, the regulatory pressure, proxied by a discretionary countercyclical buffer, is not binding and does not increase CBs as they are already moving countercyclically, making macroprudential tools redundant for IBs. Other important implications suggest that IBs do not require additional CBs to cover the DCR associated with PSIAs, as PSIAs' provisions, profit equalization reserves, and investment risk reserves already cover this risk. Additionally, the positive relationship between IB size and CB might indicate that the “too big to fail” hypothesis does not apply to large IBs in the GCC.

Framing external environmental dimensions as institutional constraints on adopting Islamic financial transactions: empirical evidence from: Libyan commercial banks

Purpose The purpose of this study is to frame the dimensions of the external institutional environment, namely, cultural-cognitive, normative and regulative dimensions as the main actors in the organisational field. More precisely, Libyan commercial banks have been identified as empirical evidence, to identify constraints of the institutional environment governing the behaviour and decision-making of commercial banks, when adopting Islamic financial transactions. Design/methodology/approach A questionnaire has been designed for 14 Libyan commercial banks which is distributed to the Board of Directors, managers, directors of departments, and personnel. The exploratory factor analysis (EFA) and the measurement model by using the first-order and second-order confirmatory factor analysis (CFA) have been applied as essential steps to embody the conceptual framework and test the research hypotheses. Findings The results of the EFA indicated sufficient correlation among the dimensions of the external environment. The CFA supported this study’s hypotheses. The modelling showed that the cultural-cognitive, normative and regulative dimensions are institutional constraints impeding Libyan commercial banks’ adoption of Islamic financial transactions. Interestingly, the findings of the CFA align with the EFA findings in supporting the conceptual framework of the research. They portrayed that the cultural-cognitive dimension has been identified by explicit and implicit cognition. Originality/value This study systematically embodies the dimensions of the external institutional environment, namely, cultural-cognitive, normative and regulative dimensions, as the main factors in the organisational field to be conceptually rich lenses to investigate social considerations to reinforce institutional thought broadly. The results of this study were consistent with extant Islamic financial literature, reflecting symmetry and similarity across commercial banks, particularly at the first stage of adopting Islamic financial transactions.

Assessing the effect of green credit on risk-taking of commercial banks in China: Further analysis on the two-way Granger causality

Green credit is a new financial instrument that has emerged in response to the call for the transformation of the “green economy" model. It aims to utilize financial means to support green industries and environmental projects, serving as a crucial lever for the integration of social and economic benefits. It also represents a significant developmental direction for the future credit business of banks. Leveraging microdata from 36 banks spanning the years 2007–2022, this study explores the correlation between green credit and the risk-taking behavior of commercial banks in China, building upon the DID model. Meanwhile, Granger causality tests are employed to investigate the bidirectional relationship between these two core objects. The research results indicate that green credit has a short-term mitigating effect on the risk-taking behavior of commercial banks. This risk-mitigating effect is more pronounced among banks with smaller assets and lower profitability. However, this effect diminishes over time, ultimately resulting in an increased propensity for risk-taking in the long run. Moreover, this highlight posits that the credit risks of banks do not influence the implementation of green credit policies. Consequently, this paper offers essential reference value for the risk management practices of commercial banks in the emerging economies and other global countries.

Risk governance and bank risk of public commercial banks of OECD

This study investigates the impact of risk governance on bank risk within the Organisation for Economic Co-operation and Development (OECD) public commercial banks. Utilizing Knight’s (1921) distinction between risk and uncertainty, it emphasizes the roles of key figures like bank directors, the chief risk officer (CRO), and the chief financial officer (CFO) in risk management. The research employs multivariate regression analysis and principal component analysis (PCA) to reveal a positive correlation between risk governance and the Tier 1 capital ratio, indicating that effective governance leads to reduced bank risk and increased financial stability. This finding is consistent with Aebi et al.’s (2012) study on risk management and bank performance. These results underscore the crucial role of robust risk governance in banking, suggesting that enhanced governance practices can significantly mitigate risks. The study contributes to the existing literature by providing empirical evidence supporting the quantification of risk through governance mechanisms, aligning with, and enriching current theoretical frameworks. While highlighting the importance of these findings, the study also acknowledges its limitations, such as potential endogeneity issues, and suggests directions for future research to expand the understanding of risk governance’s impact on bank behavior, including the exploration of additional variables and the integration of qualitative methodologies. This research holds significant implications for banking institutions and regulatory bodies, advocating for a deeper examination of risk governance strategies in banking.

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.

Evaluation of the behavior of Brazilian banks in merger and acquisition transactions

Resumo Este estudo tem como objetivo determinar o impacto de uma fusão e aquisição (F&A) no desempenho do banco consolidador em relação a seus concorrentes, tanto na abordagem de intermediação quanto na de rentabilidade, além de propor uma métrica de ranking de F&A para uma análise de desempenho mais precisa. Embora alguns estudos avaliem o desempenho dos bancos em F&As, a explicação de seu impacto sobre as instituições no mercado pode ser mais bem explorada com a proposição de uma métrica financeira-operacional, diferente das avaliações pelo mercado acionário, complementada com o ponto de vista das estratégias organizacionais que aparecem na literatura como essenciais para a continuidade da desenvoltura do tema. Avaliar as consequências das F&As de bancos e entender suas intenções proporciona uma melhor gestão tanto das instituições quanto dos aspectos socioeconômicos do país. Também fornece diretrizes e novas ferramentas de avaliação de desempenho para acadêmicos, gerentes e funcionários do governo nos processos de F&A. O método de pesquisa é quantitativo-qualitativo. Na abordagem quantitativa, foi utilizada a técnica de análise por envoltória de dados (DEA, do inglês data envelopment analysis) com um segundo estágio de regressão linear múltipla. O banco de dados foi formado por informações das demonstrações financeiras dos bancos de 2000 a 2018 (representando o CAMELS), complementadas com informações macroeconômicas e de estrutura de mercado. Na abordagem qualitativa, o impacto dessas variáveis regredidas foi determinado no estágio quantitativo para quatro estudos de caso, que são os "Quatro Grandes" bancos que representam aproximadamente 87% do mercado financeiro brasileiro. Embora alguns estudos abordem o tema da relação entre a eficiência e as F&As, este estudo mostra que não há uma relação clara e direta entre as F&As e o desempenho (a eficiência) dos bancos no mercado. Os resultados sugerem que os bancos realizam as F&As por outros motivos além da busca por eficiência, deixando a eficiência como consequência da operação. Este artigo contribui para a proposição de uma nova métrica de mensuração da eficiência das F&As, cuja função é estabelecer um ranking e relativizar a análise do desempenho dos bancos em relação ao mercado como um todo, permitindo a visualização do efeito relativo em relação aos concorrentes.

Government Borrowing and Crowding Out

We investigate the impact of fiscal expansions on firm investment by exploiting firms with multiple banking relationships. Further, we conduct a localized approach and compare the lending behavior of banks that barely met and missed the criteria of being a primary dealer, as well as barely winners and losers at government auctions. Our results indicate that a 1 percentage point increase in primary dealer banks’ bonds-to-assets ratio decreases loans by 0.2 percent, which leads to declines in firm investment, profits, and wages. Our findings are grounded in a quantitative model with which we compute the cost of borrowing on the economy. (JEL D22, E12, E23, G21, G32, H63, O11)

ՀՀ առևտրային բանկերի կապիտալի համարժեքության և իրացվելիության ռիսկերի գնահատում / Assessment of the Risks of Capital Adequacy and Realization of RA Commercial Banks

This article isdevoted to the assessment the current state of reliability and stability of RA commercial banks. The research presented situational problems arising from current global challenges, in particular, based on the financial indicators of the fourth quarter of 2023 interim reports, to assess the behavior of banks' capital adequacy and liquidity, as well as the main indicators characterizing the risks of normative capital, in case of a decline in the economic activity of the country, in case of unreliable classification of 5%, 10%, 20% and 30% of the credit portfolio of RA commercial banks, based on the financial indicators of the interim reports of the fourth quarter of 2023. The grounds of insolvency established by the banking legislation of the Republic of Armenia do not theoretically allow the formation of negative capital in banks, but in practice it is possible if the latter hide the real quality of assets in the financial statements.

Exploring Gender-Based Differences in Banking Transactions: A Data-Driven Analysis Using Multiple Linear Models and Permutation Feature Importance

This study examines gender-based differences in financial behavior, focusing on various bank transactions and demographic factors using a large dataset from Kaggle, consisting of over one million entries. By applying multiple linear regression models and permutation feature importance rankings, the study explores how different variables, such as age, geographic location, and transactional timing, influence banking patterns across genders. The findings reveal that age is a significant predictor of transaction behavior for males, while it is less impactful for females. Geographic location, particularly “Location_West” and “Location_Other,” plays a crucial role for males but has minimal influence on females. For females, transactional timing, indicated by “TransactionHour,” shows more importance in predicting banking behaviors. In contrast, gender itself does not significantly affect transaction outcomes when controlling for other variables. Overall, the study highlights the importance of demographic and contextual factors, such as age and geography, over inherent genderbased differences. These insights provide valuable guidance for financial institutions aiming to tailor their services more effectively to meet the needs of diverse customer segments. The results emphasize the need for data-driven approaches to better understand gender-specific financial behavior and improve service offerings.

The mediating role of effort expectation on digital banking behavior intention in the Indonesian bank industry: An integration of UGT-UTAUT

Using the frameworks of the Theory of Use and Gratification (UGT) and the Unified Theory of Acceptance and Use of Technology (UTAUT2), this study explores the factors that influence individual behavior and behavioral goals in the adoption of digital banking. Partial Least Square-Structural Equation Modeling (PLS-SEM) is used in the analysis of research data using the program SmartPLS 3.2.9 professional. There are 432 people in the research sample that filled out questionnaires. The results show that behavioral intentions are strongly influenced by the integration of UGT-UTAUT2 by 60.3%. Performance and effort expectations are influenced by cognitive needs, effort expectations are influenced by affective needs, and social influence is impacted by social needs. Behavioral intentions for the use of digital banking are shaped by a combination of factors such as price value, hedonic motivation, habits, facilitating conditions, and effort expectations. The relationship between behavioral intentions, affective and cognitive needs is mediated by effort expectations. In the context of using digital banking, habits and behavioral intentions are important factors that influence behavior; in contrast, cognitive needs, affective needs, performance expectations, and social influence have no direct effect on behavioral intentions.

Determinants Influencing Banking Practices among Municipal Residents

Sustaining financial stability and managing family finances require the application of sound banking practices. Finding the important variables that affect city dwellers’ banking preferences is the main goal of this study. The research was conducted in the Rupandehi District of Nepal, specifically located in the Lumbini Zone within the Western Development Region, specifically within the Tilottama Municipality. A diverse range of individuals, encompassing various age groups, genders, occupations, and educational backgrounds, actively participated in the study by diligently completing comprehensive questionnaire. Using a mix of descriptive and causal research frameworks, the study found that factors like convenience, and security have a positive influence on banking behaviors. Conversely, no meaningful relationship was found between the urban population’s banking practices and awareness, availability and motivational factors. The similarity of bank services and the greater levels of financial awareness and literacy that are common in cities may be the cause of this lack of correlation. Therefore, the results of this study may be helpful to banking institutions in creating and putting into practice plans to boost banking participation.

Regulatory capital, default risk and efficiency: a comparative analysis between Islamic and conventional banks in the MENA region

The main objective of this article is to study the effect of the regulatory environment on the behaviour of Islamic and conventional banks in 10 countries in the MENA region regarding the level of capital, the risk of default and banking efficiency. In other words, we seek to show the importance of the conventional and Islamic banking system in MENA countries and to assess the efficiency of these banks under the pressure of prudential regulations through a comparative analysis. Our results show that the riskiest banks are those with a high level of capital. Furthermore, the results suggest that the most profitable banks in the MENA region tend to increase their level of risk. We also find that a higher capital requirement encourages banks to take a higher risk with higher profitability.

THE ROLE OF RELIGIOSITY IN INFLUENCING THE KNOWLEDGE AND SOCIAL ENVIRONMENT OF SAVINGS INTEREST

The aim of this research is to analyze the influence of knowledge, social environment and religiosity on interest in saving in Islamic banks. The research methodology used is quantitative with experimental techniques to test the impact of knowledge and social environment on students' tendencies to practice saving religiously as a mediating factor. The population of this study consisted of students registered at the Faculty of Economics, UIN Malang, with a total of 2494 individuals, and the sample used was 147 students selected using purposive sampling. Data was collected through a Google Form questionnaire which contained statements related to research variables. The research results show that knowledge, social environment, and religiosity have a significant influence on interest in saving in Islamic banks. The conclusion of this research is that these factors can be important considerations in understanding savings behavior in Islamic banks, so they need to be considered in developing marketing strategies and sharia financial education.

A Study on Macro Measurement Methods and Volatility Characteristics of Interest Rate Risk of Commercial Banks under the New LPR Mechanism

Abstract The interest rate risk of commercial banks is closely related to the effectiveness of the LPR mechanism. In this paper, the interest rate market is divided into three stages according to the process of interest rate marketization, and a six-sector New Keynesian MS-DSGE model is constructed by adding monetary regulation variables. The parameters in the model that are influenced by interest rate marketization and the new LPR mechanism are transformed by Markov zone transformation. The interest rate risk of commercial banks is measured by the impulse response functions of uncertain interest rate shocks to the interest rate sensitivity gap and the duration gap, and the volatility characteristics of interest rate risk in different stages of interest rate marketization are compared and analyzed. The results show that in the third stage (2019-present), the LPR mechanism is transformed from old to new. Under the δR = 0.5 shock, the commercial lending interest rate tends to stabilize around 0.00038, and the borrowing interest rate tends to 0 in all 3 differentiated target parameters in the 10th period. For this reason, the differentiated interest rate pricing behaviors of commercial banks should be considered comprehensively, and the LPR target should be set reasonably so as to get the optimal policy effect.

A systematic review of customer Sharia compliance behaviour in Islamic banks: determinants and behavioural intention

PurposeThis study aims to investigate what past scholars have learned about Muslim consumer compliance behaviour in Islamic banks and identify what future research is needed. In addition, it also explores the relationship model between the previously studied determining factors and the customer’s Sharia compliance behaviour.Design/methodology/approachThis study used a bibliometric–systematic literature review analysis using the Preferred Reporting Items for Systematic reviews and Meta-Analyses (PRISMA) technique by reviewing the articles published from 2013 to 2023. The PRISMA procedures involved several stages, including identification, screening, eligibility, analysis and conclusion based on the findings.FindingsThe results found that customer Sharia compliance behaviour determinants in Islamic banks are attitude, subjective norms, perceived behavioural control, Islamic financial literacy, religiosity, consumer conformity, Islamic branding and behavioural intention. Interestingly, the results indicated that such factors as consumer conformity, Islamic branding and sustainable intentions are less discussed.Practical implicationsDecision-makers in Islamic banks must use digital technology to offer better service and make operations more reachable for customers to access information, complete transactions and manage their accounts by Sharia principles. Therefore, the bank needs to continually produce innovative products and services so that customers have a greater variety of options to suit their Sharia-compliant financial needs. Theoretically, this study has contributed by finding the main critical domains influencing customers’ Sharia compliance behaviour, such as attitudes, subjective norms, perceptions of behavioural control, knowledge of Islamic finance, religiosity, consumer conformity, Islamic branding and behavioural intentions. Then, it makes a theoretical contribution by establishing a model that explains how customers make decisions based on Sharia-related factors in the context of their purchases.Originality/valuePast studies focused on the Sharia compliance behaviour in paying Zakat for takaful customers. Therefore, this study provides critical factors of Sharia compliance behaviour on conformity, Islamic branding and sustainable intention regarding unexplored consensus on the determinants and outcomes of customer Sharia compliance behaviour of Islamic banking.

“Go green” – evaluating the roles of environmental concerns, environmental social norms and green technology in fostering pro-green banking behaviors

Purpose The purpose of this paper is to evaluate the relationship between bankers’ perspectives and their pro-green banking behaviors (i.e. intentions). Specifically, how do bankers’ perspectives on environmental concerns, environmental normative structure and green technology affect their intentions toward G-banking activities? Design/methodology/approach A theoretical framework of the theory of bounded rational planned behavior (TBRPB) as its foundation was established. Using measurement scales to measure different aspects of environmental concern, environmental normative structure, green technology, attitudes, perceived behavioral control and subjective norms, a survey instrument was developed to examine the various associations implied by the model of TBRPB. Data were collected from the bankers of selected commercial banks in Bangladesh following the random sampling procedure. The data were analyzed using the partial least square structural equation modeling technique. Findings Findings indicate that all of the predictors appear to be robust in predicting the G-banking intention of the sampled bankers in Bangladesh. The results also show that attitudes, subjective norms and perceived behavioral control have significant mediating effects toward bankers’ bounded rational G-banking intention. Research limitations/implications There are a few limitations in the study. First, the study considers environmental concerns as an antecedent of the attitude of bankers toward G-banking activities. Future studies can explore other variables related to environmental problems to study G-banking adoption and practices. Second, this study only considers the private conventional bankers as respondents to the survey to assess G-baking intention. In the future, other types of bankers, such as Islamic bankers and public banks’ bankers could be included in the survey to explore G-banking practices. Finally, this research has been done in a developing country-context. Practical implications In this study, environmental concerns of bankers appeared to be highly significant predictors to influence their attitudes toward bounded rational G-banking intention. Similarly, the social normative structure also appears to be a robust antecedent of subjective norms to influence bounded rational G-banking intention of respondent bankers. Finally, green technology or bakers’ personal and skill-related ability to control bounded rational G-banking intention also appeared to be a strongly significant predictor of green banking activities. All this evidence implies that respondent bankers in the sample responded positively to provide their positive intention toward G-banking activities based on their environmental concern. Social implications Important social implication of the current study is G-banking practices can help reduce carbon emissions and other pollutants which would enrich overall environmental sustainability and ecological conditions. Originality/value Few studies are directed on G-banking perspective in Bangladesh. This research is one of the empirical studies which will certainly add values for the clients, institutions and policymakers in banking paradigm.