Commercial Banks In Pakistan Research Articles

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.

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.

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.

Empirical Study to Evaluate Financial Fitness of Listed Commercial Banks of Pakistan

The main purpose of this research is to find the effect of financial fraud, bank size, liquidity, solvency, and efficiency on the financial performance of selected Pakistani commercial banking sector. This research is conducted for assessing the financial stability of the commercial Banking sector of Pakistan. In this research, the ratio analysis technique is adopted for investigating the financial performance of the Banking Sector for the period 2012 to 2018. This study found that bank size, financial fraud, efficiency, solvency and liquidity have a significant impact on the financial performance of commercial banks in Pakistan. This research suggested that commercial banking zone working in Pakistan should be brought into being place fraud discernment appliance by framing up a well-organized and systematic, well-established, and reliable and operating fraud detection sub-division to supervise all the transactions that are contemplated vulnerable to fraudulent practices to minimization vice for them to maximization of profits for better monetary/financial progress/performance.

Nexus between Corporate Governance and Bank ‘Risks: Insight from the Commercial Banks in Pakistan

Nexus between Corporate Governance and Bank ‘Risks: Insight from the Commercial Banks in Pakistan

Influence on Banks' Credit Risk Through Monetary Policy Instruments: A Study of Listed Commercial Banks in Pakistan

Monetary policy goals in any country are to accomplish economic and social goals to achieve financial prosperity. The study determined the impact of monetary policy tools on bank’s Credit Risk, which was previously unexplored. The analytical and econometrical design was adopted in this study. Descriptive statistics, correlation matrix, CD test, and DK regression were employed to determine the impact of monetary policy instruments on the bank’s Credit Risk. Multivariate statistical techniques were used to evaluate balanced panel data from 22 banks currently operating in Pakistan cover the span of 2009-2021. Banks were declared cross-sectionally dependent. ROE was positively associated with MG, ROA was negatively linked with INF in the Correlation Matrix. The overall research explored that PR and MG had a positive impact on ROE and ROA, but SLR showed an inverse impact on Credit Risk. This research used a large number of banks as a novel component in Pakistan’s context and filled a gap in the country’s banking literature. The paper will assist the government, managers of the banking industry, monetarists, stakeholders, investors, academicians, and researchers. This study could be extremely helpful to regulators in formulating favorable policy rates that fulfill Pakistan’s economic targets.

Impact of Credit Risk Management on Bank’s Performance: Empirical Study on Commercial Banks of Pakistan

Impact of Credit Risk Management on Bank’s Performance: Empirical Study on Commercial Banks of Pakistan

Untold Intelligence: Tacit Knowledge and Marketing Success

Salespersons are a source of invaluable market knowledge that can help change the course of organisational strategy. However, research on extracting this knowledge is scarce. Therefore, this research aims to develop and empirically test a model that explains the tacit knowledge exchange process between salespersons and marketing. Data were collected from 224 randomly selected business-to-business and business-to-consumer salespersons (boundary spanners) of commercial banks in Pakistan. Structural equation modelling (SEM) via maximum likelihood estimation (MLE) was conducted using AMOS 24. Except for inter-functional communication quality and inter-functional conflict, all antecedents significantly influence tacit knowledge exchange. Tacit knowledge exchange significantly affects relative efficiency, marketing program innovation and relative effectiveness. Training programs that bring together the sales and marketing employees to increase trust, increase socialisation opportunities and increase task conflict may strengthen the tacit knowledge exchange process in the banking sector.

Gender bender organizational barriers and women’s career progression: Evidence from commercial banks in Pakistan

The study aims to investigate the effect of gender bender organizational barriers on women career progression in Commercial Banks in Pakistan. The Perceived barriers were gender stereotype, socio-cultural beliefs, organizational structure, family responsibilities and individual characteristics. To serve that purpose, specifically branches of all public and private banks in twin cities i-e Islamabad and Rawalpindi, were selected. Survey research strategy was adopted to collect data from 252 branches of selected sample. Convenience sampling and random sampling techniques were used to select sample of branches. Self-administered questionnaires were distributed among the three clusters which are top managers, middle managers and sub-ordinate. Collected data was tested on IBM SPSS by using multiple linear regression, descriptive statistics reliability and correlation analysis. The findings indicate that gender-specific organizational systems negatively affect women career progression in banks of Islamabad and Rawalpindi. The theoretical support was provided by gender and feminist theories and Gendered Organizational Structure (GOS) Model” and its three sub-models.

Liquidity Creation and its Impact on Economic Growth: Moderating Role of Firm Size

The study aims to examine the influence of Liquidity Creation (LC) on Pakistan's Economic Development (GDP) to investigate the moderating role of firm size and its abiding association in this relationship. Banks create liquidity by managing their portfolios of assets and liabilities with various maturities. The current study used an estimated amount of liquidity created by commercial banks in Pakistan using the "Catfat" model over the last twenty-two years. The estimated LC is employed in this study to assess its influence on GDP growth. Additionally, the research examines the moderating role of firm size between LC and GDP. Furthermore, secondary time series data for this research was collected from the financial statements and World Bank Data from 2000-2021. The study employs a regression technique to test the hypotheses. The outcomes indicate that LC has a significant positive impact on GDP. It implies that when commercial banks create liquidity, it boosts economic growth. The results revealed that firm size does not moderate the relationship between the LC and GDP, neither strengthens nor weakens. The study put forward that conventional banks play a substantial role in contributing to Pakistan's economic growth by creating liquidity in the market. The study holds importance in its ability to shape economic policies, provide financial institutions direction, and offer investors advantages. It contributes to academic research, provides practical insights, and has worldwide applicability in enhancing comprehension of financial systems and their influence on economic growth.

<b>Analysis of Knowledge Management, Organizational Ambidexterity and Financial Innovation in Banking Sector</b>

The banking industry is the backbone of an economy. The competition in the banking sector and the threat of a third financial crisis require banks to become more effective and efficient. It may be accomplished through financial innovation. The primary purpose of the research is to develop a framework for fostering financial innovation through evaluating the relationship among knowledge management (KM), organizational ambidexterity (OAMB), and level of financial innovation (LoFI) in the banking sector and to develop a framework. To achieve the research aim, a survey was carried out among the commercial banks of Pakistan. The findings of this research are based on 383 responses from Pakistan. The collected data was analyzed using structural equational modeling. Findings indicated that KM significantly influenced OAMB and LoFI, and OAMB significantly influenced LoFI. Moreover, organizational climate (OC) moderated the relationship between KM and OAMB, and environmental dynamism moderated the relationship between OAMB and LoFI. The researcher also analyzed the relationship between OAMB, KM, and LoFI and found that OAMB mediated the relationship between KM and LoFI. Based on the research findings, the researcher suggested that banks should enhance the level of KM and OAMB as these two things increase LoFI. Banks should also foster OC in a way that may enhance learning and sharing. Likewise, banks should also critically appraise the external environment to increase LoFI.

A moderated mediation analysis on fintech adoption, social influence, competitiveness and financial performance of commercial banks in Pakistan

Commercial banks in Pakistan have a great potential to improve competitiveness and financial performance through fintech adoption. Therefore, this study aims to assess the impact of fintech adoption on financial performance of commercial banks while emphasizing the moderating role of social influence and mediating role of competitiveness in the banks in Pakistan. A cross-sectional survey was conducted with five largest and most reputed commercial banks in Pakistan. Bank employees, particularly bank managers, were chosen as the respondents. The sample size for the study was 367 bank managers selected randomly from the chosen commercial banks. A standardized and structured questionnaire was used to interview the selected respondents to collect primary data. The partial least square structural equation modelling was employed to analyze the data and process the findings of the study. The analysis revealed that 62% of the respondents were male, and nearly 47% were in the age of 40 years and above. The study found a positive and significant impact of fintech adoption on the financial performance of banks. It was also found that social influence had a significant impact on banks’ competitiveness. Moreover, the findings revealed that competitiveness had a significant mediation impact on the increase in fintech adoption and consequently on the financial performance of banks. AcknowledgmentThe authors are thankful to the respondents (i.e., the employees of the selected banks) to participate in the survey without any financial benefit.

Data Security, Customer Trust and Intention for Adoption of Fintech Services: An Empirical Analysis From Commercial Bank Users in Pakistan

The research aims to empirically investigate the effect of perceived easiness of use (PEU), perceive usefulness (PU), data security (DAS) on adoption intention of Fintech services through Fintech promotion (FP), and customer trust (CT) in commercial banks of Pakistan using Technology Acceptance Model (TAM) in Pakistan. The data of 297 banking services users were collected through self-administered survey. This quantitative study employs cross sectional research design, and data was analyzed through Partial Least Square (PLS)-Structural Equation Modeling (SEM) technique. The regression results indicate that DAS, PEU, PU, FP, CT have positive and significant influence on adoption intention of Fintech Services. The PEU, DAS, PU also have positive and significant effect on CT. In addition, customers’ perception about DAS and PEU also have a positive and significant influence on customers’ perception about importance of FP. On the contrary, FP has insignificant effect on CT and PU also has insignificant effect on FP. Based on researchers findings, this study would be an addition to the existing literature pertaining to adoption of Fintech services by providing novel understanding about the determinants of users’ behavior for adoption of Fintech services. Therefore, this study could help to regulators that how data security through proper IT infrastructure could help to increase the adoption of Fintech. Moreover, findings of the study also indicates that it is precisely important for Fintech innovators to understand their customers’ attitude regarding transparency of data and its security. Such operational activities enable customers to be aware of adequate use of their data and its secure storage.

The effect of covid-19 on the profitability of commercial banks: evidence from South Asian region

This study aims to examine the effects of COVID-19 on the profitability of commercial banks in the South Asian region. This study investigates and evaluates licensed commercial banks' financial performance in Sri Lanka, Bangladesh, and Pakistan. The data were drawn from quarterly financial statements over 15 quarters from 2018 Q1 to 2021 Q3. Twelve commercial banks in Sri Lanka and Bangladesh and ten commercial banks in Pakistan have been taken as the sample for this study. Capital adequacy ratio, Loan to deposit ratio, Non-performing loan ratio, and COVID-19 are the independent variables. Return on assets and Return on equity are the profitability proxies, and bank size and bank ownership are the control variables. Panel regression was used to analyze the data. The findings revealed that the COVID-19 pandemic significantly impacts the profitability of commercial banks in Sri Lanka. And on the contrary, the COVID-19 pandemic significantly negatively impacts the profitability of commercial banks in Pakistan. Furthermore, Pakistan's banking sector was found as the primarily affected banking sector in the South Asian region in terms of profitability during the pandemic. The outcomes of this study suggest that banks should frame more into risk management strategies and Basel III requirements. In addition, irrespective of the size of the banks, the managers should not underplay the importance of capital adequacy. Hence consistent evaluation of the CAR is vital. And also, this study recommends that bank managers should focus more on credit risk management, particularly in turbulent conditions.

Predicting Financial Failure using Altman’s Z-Score Model:Evidence from CommercialBanks in Pakistan

This paper aims to explore the predictability of financial failure in commercialbanks in Pakistan using Altman Z-score Model. Predicting the early financial failure indicates the concerned parties to intervene and take appropriate corrective actions before the bank finally fails. To achieve these objectives, the Altman Z-score model and current ratio tests are applied to the commercialbanks in Pakistan based on their financial statements and the analysis of the financial ratios during the period from 2016 to 2021. Theresults of the study show that Altman’s Z-Score model and current ratio appropriately predict the financial distress of commercialbanks in Pakistan, especially during the last two years. The results show that there isrisk of financial failure inalmost half of the commercialbanks of Pakistan.

Credit Risk Management and Its Impact On the Performance of Commercial Banks in Pakistan: An Application of Penal Var Approach

Credit risk is nothing else but the default by the borrower. Credit risk management practices are adopted by the banks to mitigate this risk. It is crucial for every bank or financial institution to follow the effective risk management system to avoid or mitigate the credit risk. This paper is an attempt to investigate the effect of default or credit risk management on the financial performance of banks and how factors of CRM affect each other. VAR approach has been used to analyze the penal data. Sixteen private commercial banks have been taken into the consideration. Data has been collected from the year 2012 to 2021. Granger causality and impulse response have also been identified and analyzed. E view has been used for the purpose of analysis. Results of Granger causality reveal that almost all the variables are affecting or explaining each other. There is a bidirectional association ship between LTDR and ROE. In variance decomposition analysis, all the variables are mostly being affected by themselves or by their own shocks and shocked of other variables. Finally, short term relationship has been found or identified through VECM. This study is helpful for all the stakeholders of commercial banks. This study is also helpful for the students using penal var approach for understanding and analysis purpose. This study is also helpful for the decision makers to frame policy of credit risk management and see how effective risk management affects the financial health of commercial banks.

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.

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

Funding Liquidity and Risk-Taking: Evidence from the Commercial Banks of 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 Statistical Association between Macroeconomic Indicators and the Performance of Commercial Banks in Pakistan

The banking industry of Pakistan is growing over years and it is playing a dynamic role in enabling the business environment in the country. The idea is Constructed on the fact, that there is a substantial impact of commercial banks (CB) on the economic advancement of the country. in response, the macro dynamics of an economy also influence the very existence of Banking and its footprints on the economy. Banks are operating to smooth out the transaction process in the economy to cause ease for doing daily life business. It is important to investigate that the changes in the macroeconomic factors of a country can have serious implications for the profitability dynamics of these banks. This paper examines the cost-effectiveness of CBs in Pakistan for the duration of (2006 to 2018), against the variations in the macroeconomy. The study is based on Panel data assessment methods, to examine the effects of foremost external factors i.e. Exchange rate, GDP, Interest rate, and Money supply on the profitability of CBS in Pakistan. This study uses Return on Assets (ROA) and Return on Equity (ROE) to measure the profitability of banks in Pakistan. The study uses a random effect model and the outcomes of this study demonstrate that, in the case of Pakistani CBS, the impact of selected macroeconomic factors is almost negligible to determine a bank's profitability except for only one factor, that is the money supply, which expresses a progressive influence on banks’ profitability in Pakistan.