Development Bank Research Articles

A Comparative Study of Bitcoin Business Development and Customer Security Protection of Major Banks in the United States-Examining Wells Fargo, JPMorgan Chase, and Citibank as Case Studies

This essay provides an extensive comparative analysis of Bitcoin-related services among three major US banks—Wells Fargo, JPMorgan Chase, and Citibank—focusing on their business development, application conditions, and customer security protection mechanisms. By understanding the different approaches these banks take in handling Bitcoin services, the analysis sheds light on emerging trends in the banking sector's approach to cryptocurrency, customer risk assessment, and the growing importance of digital asset security. The study aims to present a comprehensive overview, highlighting the strengths and weaknesses of each bank in terms of their engagement with Bitcoin while also providing strategic recommendations for enhancing the overall Bitcoin service landscape in traditional banking.

How Escaping the Middle-Income Trap: Key Factors for Indonesia's Growth?

This study investigates the complex interplay between human development index, foreign direct investment, and investment efficiency in driving economic growth. Utilized time-series data during 2000 to 2022, sourced from the World Bank and the Asian Development Bank. Employing the ARDL model. The findings reveal a strong positive correlation between HDI and economic growth, highlighting the critical role of investments in education, health, and social welfare. While FDI significantly contributes to economic growth through technology transfer and productivity enhancement, the study surprisingly finds limited evidence of a direct link between investment efficiency and economic growth. This suggests that factors such as institutional quality and innovation play a more dominant role. These findings have crucial implications for Indonesia, which faces the challenge of escaping the middle-income trap. Prioritizing human development, attracting high-quality FDI, and fostering a conducive investment climate through institutional reforms are crucial for sustainable and inclusive growth. By investing in human capital, promoting technological innovation, and effectively leveraging FDI, Indonesia can overcome the middle-income trap and achieve long-term economic prosperity.

Financial development and regional bank instability in the United States: An analysis of bank balance sheet structures

This article demonstrates that financial development in the United States has heightened the vulnerability of both sides of regional banks’ balance sheets to financial market fluctuations, drawing on the concept of financial circulation of bank deposits. It first argues that financial development provides diversified short-term investment channels for non-financial sectors to manage their liquid asset holdings. Since banks intermediate money circulation, changes in liquid asset portfolios inevitably result in sudden inflows and outflows of deposits to these banks. These deposit flows are highly clustered during specific financial phases and are subject to financial volatilities rather than local business cycles, making regional banks’ liabilities volatile with market fluctuations. Second, to mitigate increased deposit instability, regional banks hold a higher proportion of marketable securities to manage liquidity. But the mark-to-market nature of security prices further puts potential instability on the asset side of banks’ balance sheets. Extremely, the sudden volatility in the financial markets could simultaneously cause deposit flights and choke off refinancing capability, causing a bank run.

A COMPARATIVE ANALYSIS OF PPP GOVERNANCE IN SELECTED LATIN AMERICAN COUNTRIES: A QUALITATIVE AND QUANTITATIVE APPROACH

This paper aims to propose guidelines for an optimal relationship between a PPP unit and different entities that participate in a PPP process, according to the size of the country and considering the phases of the PPP process. We evaluate the different governance models of this type of alliances in the region. To this end, we analyze the role played in the PPP project cycle by the main public actors (PPP units, Ministries of Finance, Contracting Ministries and the Development Bank). We also seek to quantitatively analyze how the governance of PPPs influences the quality and quantity of projects through the incentives it creates for different actors. After diagnosing and elaborating the guidelines based on the analysis of incentives in institutional frameworks of selected countries, we tested the results considering the INFRASCOPE. This publication contains a ranking of LATAM countries concerning their willingness to carry out PPPs and for this purpose uses variables such as Regulations and Institutions, Project Preparation and Sustainability, Financing, Risk Management and Contract Monitoring, and Performance Evaluation and Impact. This exercise involves using principal component analysis to assess the robustness of the survey. To facilitate the analysis and interpretation, we standardized the scores of the factors assigned to each indicator along the scale from 0 to 100. The result of the exercise indicates that Brazil and Chile are the countries with the best governance conditions for PPPs. Peru, Costa Rica, Colombia, El Salvador and Mexico also have desirable levels of governance.

Small and medium-sized banks and pollution emissions from industrial enterprises

Drawing upon the theory of comparative advantage of small and medium-sized banks, this paper employs pollution data from industrial enterprises in China spanning 2000 to 2014. Utilizing the establishment of urban commercial bank branches in counties as a quasi-natural experiment, we investigate the impact of the development of small and medium-sized banks on industrial enterprises' pollutant emissions and the underlying mechanisms of this effect. Our findings reveal that the establishment of urban commercial bank branches in counties significantly reduces wastewater and sulfur dioxide emissions from enterprises, a result that remains robust across various tests. Further heterogeneity analyses show that this pollution reduction effect is more pronounced for small and medium-sized, more finance-constrained, start-up firms, and firms located in areas with low carbon pilots and higher levels of marketisation. The analysis of the impact mechanism suggests that the establishment of urban commercial banks achieves this reduction by increasing enterprise output, thereby diluting pollution intensity, and fostering green technological innovation, which enhances pollution treatment capabilities. Additionally, our research highlights that government intervention significantly influences the pollution reduction effect of urban commercial banks and the mode of this influence.

Các nhân tố ảnh hưởng tới hiệu quả tài chính tại các ngân hàng thương mại cổ phần Việt Nam

Achieving positive financial performance is essential to ensuring the survival and sustainable development of joint stock commercial banks (JSCBs). Financial performance is affected by many internal and external factors of commercial banks. This study was conducted to examine the impact of factors on the financial performance of Vietnamese joint stock commercial banks. The study used data published on audited financial statements of banks in the period from 2019 2023 and linear regression method to explore the factors affecting the financial performance of Vietnamese joint stock commercial banks. The research results showed that enterprise size has a positive impact on financial performance. Meanwhile, capital intensity, risk, and bank age have a negative impact on the financial performance of banks. GDP has a positive impact and inflation has a negative impact on the profitability of banks. On that basis, recommendations are made to improve the financial efficiency of commercial banks.

Exploration and Practice of the Integrated Development of Rural Commercial Banks and E-Commerce—Taking TK Rural Commercial Bank as an Example

Exploration and Practice of the Integrated Development of Rural Commercial Banks and E-Commerce—Taking TK Rural Commercial Bank as an Example

Digital Financial Development and Commercial Bank Stability

In today's economically globalized and rapidly evolving IT landscape, digital finance has emerged as a key driver in the financial sector. This research evaluates the stability of commercial banks by analyzing their profitability and risk-taking capacity, while also exploring the effects of digital financial development (DFD) on this stability. The outcomes suggest that DFD enhances both profitability and risk-taking capacity of commercial banks, ultimately strengthening their overall stability. Notably, operational efficiency plays a facilitating role in this process. Additionally, the study uncovers regional and size-based differences in the impact of DFD on commercial bank stability. Upon conducting robustness and endogeneity checks, the findings remain consistent, affirming the universal applicability and credibility of digital finance in bolstering commercial bank stability. These discoveries provide essential theoretical support and practical advice for strategic planning and policy-making in the digital finance era for commercial banks.

Critical Appraisal on the Development Assistance of All India Development Bank: A Lesson to Financial Institutions

Critical Appraisal on the Development Assistance of All India Development Bank: A Lesson to Financial Institutions

Evaluating the Role of BRICS in Shaping Global Economic Governance: A Comparative Analysis of Policy Approaches and Outcomes

This study evaluates the role of BRICS (Brazil, Russia, India, China, and South Africa) in shaping global economic governance through a normative analysis of policy approaches and outcomes. By examining the collective strategies and individual priorities of BRICS nations, the research highlights their contributions to global economic equity, inclusivity, and sustainability. Key initiatives, such as the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA), are analyzed to assess their practical impact and alignment with normative principles. While BRICS has made significant strides in promoting reforms and fostering multilateral cooperation, internal tensions and geopolitical challenges have limited its ability to present a cohesive front. This study concludes that BRICS has substantial potential to redefine global governance, provided it strengthens internal unity and enhances its normative vision for a more inclusive international system.

The Evolution of the BRICS Trade Alliance: Analysing Strategic Partnerships and Economic Interdependence in the Global South

The BRICS alliance—comprising Brazil, Russia, India, China, and South Africa—has emerged as a vital platform for fostering economic interdependence and strategic partnerships in the Global South. This study employs a normative juridical approach to analyze the legal frameworks, trade mechanisms, and institutional structures underpinning the alliance. Findings reveal that initiatives such as the New Development Bank, intra-BRICS trade agreements, and currency swap arrangements have strengthened collaboration among member states. However, challenges such as trade imbalances, geopolitical tensions, and institutional inefficiencies persist. This paper highlights the potential of BRICS to reshape global economic governance by advocating for equitable trade practices and promoting sustainable development in the Global South.

Sharia Principles In Risk Management In Islamic Banking: A Literature Review

Islamic banking operates based on sharia principles, which strictly prohibit practices such as riba (interest), gharar (excessive uncertainty), and maysir (gambling). These prohibitions directly influence the approach to risk management. This study aims to review existing literature related to the application of sharia principles in risk management within Islamic banking. To thoroughly explore the topic, this study employed a library research method, which involved collecting, analyzing, and synthesizing information from various academic sources, including scholarly journals, books, and research reports. The findings reveal that Sharia principles not only provide a unique framework for risk management but also strengthen the financial stability of Islamic banks by avoiding speculative practices and excessive uncertainty. Furthermore, the Sharia Supervisory Board (known as DPS) plays a crucial role in ensuring compliance with these principles. Thus, the application of Sharia principles in risk management significantly contributes to the sustainability and stability of Islamic banking. However, challenges remain, such as the limited availability of Sharia-compliant financial instruments. This study recommends further study to develop innovative and Sharia-compliant risk management instruments and strategies to support the future development of Islamic banking

THE RELATIONSHIP BETWEEN ARTIFICIAL INTELLIGENCE AND E-ACCOUNTING PROGRAMS: IMPACT ON THE QUALITY OF FINANCIAL REPORTS IN IRAQI BANKS

This study examines the correlation between electronic accounting software and artificial intelligence programs and their influence on the quality of financial reports in the banking sector of Iraq. The researchers devised a questionnaire comprising three dimensions to accomplish this objective. The initial set of questions pertained to using artificial intelligence applications by the study sample bank, either for customer service purposes or to achieve the bank's objectives. The second set of questions pertained to the accounting programs utilized, their advantages and disadvantages, and their compatibility with advancements in technology and communications. The third dimension encompassed inquiries on the essential attributes necessary for the excellence of financial statements by the criteria set by international financial reporting standards and the Central Bank of Iraq. Out of the 46 banks listed on the Iraq Stock Exchange in 2024, a sample of 31 institutions was chosen. Among them, there were 12 Islamic banks and 19 commercial banks. 217 questionnaires were distributed for analysis, with each bank receiving seven questionnaires for the directors of finance, internal audit, information systems, inspection, research and development, and their assistants to answer the research questions. The hypotheses were tested using IBM SPSS 29.0.10, employing practical analysis and simple and multiple linear regression. The research findings indicate that all banks in Iraq utilize electronic accounting. However, the quality of programs differs across banks based on the scale of financial activities and the amount of money they handle. The research also determined that artificial intelligence is advancing in the applications of banks, except for the Development Bank, the Bank of Baghdad, and the First Bank of Iraq. The study also demonstrates a strong correlation between the implementation of artificial intelligence in accounting and its positive impact on the reliability and accuracy of financial accounts.

Influence of Structural Adjustment on Organisational Development of Kenya Commercial Bank in the Great Rift Region in Kenya

This study aimed to determine the influence of structural adjustment on the organisational development of KCB Bank Ltd. Changes to the organisation's structure that may result from internal or external causes and frequently have an impact on how a business performs. KCB Bank Ltd. has been implementing changes for its organisation in an effort to improve its performance and growth, just like any other organisation operating in a highly competitive climate. This study employed a descriptive survey design and targeted employees of the bank in the Great Rift Region. A sample size of 48 respondents was used. Data for the study was collected using a self-administered, semi-structured questionnaire and a key informant interview. Descriptive and regression analysis was used to analyse quantitative data, whereas content analysis analysed qualitative data. These results demonstrated that the bank has been undergoing structural adjustment, which has improved organisational development. However, there are still gaps in employee participation in decision-making and transfers/placement of employees from one department to the other. Management should, therefore, promote a culture of open and transparent communication within the bank. They should also establish transparent guidelines and processes for employee transfers/placements between departments.

Digital Finance in Algeria: Analyzing the Impact of COVID-19 on E-Banking Adoption

This study aims to analyze the impact of the COVID-19 pandemic on the development of electronic banking in Algeria, focusing on how the health crisis has accelerated the digital transformation of the banking sector and identify the challenges and opportunities associated with this transition in a specific Algerian context. The study uses a descriptive and analytical approach. It is based on statistical data to illustrate the evolution of electronic banking in Algeria. The analysis focuses on public policies, bank initiatives, and consumer behavior. The study reveals that the COVID-19 pandemic has significantly impacted the development of e-banking in Algeria. There has been a sharp increase in digital transactions, including bank transfers, electronic payments, and ATM withdrawals. Electronic banking has played a crucial role in ensuring the continuity of financial services during the lockdown periods. However, challenges persist in terms of security, financial inclusion, and the development of digital infrastructure.

Ethno-Political Dynamism and Its Role in the Development of Indonesian Islamic Banking Law

Studies on Indonesia's political conditions during the New Order until the 1990s reveal a significant shift in political dynamics, transitioning from a stance largely closed to Islamic interests to one that increasingly accommodated Islam through specific policies. This article aims to determine the influence of the ethnopolitical dynamics of Islam formed by the New Order on the development of Islamic banking law and its impact on the financial sector in Indonesia. Through a historical and contextual literature review, supplemented by interviews, it was observed that ethnopolitical dynamics significantly influenced the evolution of Indonesian banking law during and after that period. The influence of Islamic ethnopolitics, particularly in academic circles, has increasingly emerged as a dynamic force in facilitating the development of Islamic banking in Indonesia, underscoring the numerous challenges encountered in achieving market acceptance. Although its growth has not met market expectations, ethnopolitically, Islam continues to lobby for Islamic banking regulations. Furthermore, since 2019, the role of ethnopolitics has continued to realize policy and regulatory responses aimed at encouraging the growth of Islamic finance in Indonesia.

Du Point Method as Tool for Financial Performance Analysis

This study undertakes a comprehensive financial performance analysis of Agricultur al Development Bank Limited (ADBL) over a specified period, employing the Du Pont method. Focusing on key financial metrics such as Net Profit Margin (NPM), Total Asset Turnover Ratio (TATR), Equity Multiplier (EM), and Return on Equity (ROE), the study aims to provide a detailed examination of ADBL’s efficiency in translating revenue into profit, asset utilization, capital structure decisions, and overall profitability. By utilizing the Du Pont method, the analysis aims to break down ROE into its constituent parts, offering valuable insights into the sources of ADBL’s financial performance and shedding light on the interplay between profitability, efficiency, and financial leverage. The study adopts a case study research design with quantitative approach with ADBL as the focal point. This approach allows for an in-depth exploration of the relationships between variables that influence the financial decisions within the bank. Findings from the analysis highlight fluctuations in NPM, stable asset utilization as indicated by TATR, an increasing reliance on debt financing depicted by EM, and significant fluctuations in ROE. Correlational analysis underscores the influential role of profitability in achieving better ROE, along with a moderate negative correlation between NPM and EM. In conclusion, these insights empower stakeholders with valuable information for assessing ADBL’s financial strength, risk profiles, and strategic decision-making within the banking industry.

Innovation-led Governance for Economic Development of Bangladesh

A strategic approach to public sector governance, innovation-led governance entails incorporating innovation into larger governance frameworks. Governments can boost innovation in a number of ways, such as investing in new technology or talents, using innovative approaches to governing, and modifying current procedures. Because it enables the conversion of scientific and technological advancements into profitable economic activity, innovation is a critical component of economic progress. This study is developed to examine the relationship between innovation and the economic development of Bangladesh. Financial Innovation, Trade Openness, Human Development Capital, Gross Capital Formation, and Domestic Credit to Private have been taken as an indicator of innovation measure where GDP measures the country’s economic development. Financial Innovation, Trade Openness, Human Development Capital, Gross Capital Formation, and Domestic Credit to Private have been considered independent variables, and GDP as a dependent variable. This study used secondary data for analysis purposes. Secondary data has been collected from different websites (World Bank, World Bank Development Indicators, Bangladesh Bank, Bangladesh Bureau of Statistics). Several tests (Unit root test, Johansen Co-integrating test, Vector Error Correction Model, Impulse Response Function, ARDL, Bound test) are employed for secondary data analysis. All the variables are non-stationary at the level and stationary at the first difference. i.e., I (1). Johansen co-integrating test found that there is a long-term significant relationship between the dependent variable and independent variable. Further, the VECM and impulse response function (innovation accounting) calculate the Speed of Adjustment and find a short-term shock related to GDP. ARDL test and bound test showed that Trade Openness (TO), Human Development Capital (HD), and Gross Capital Formation (GCF) are positively correlated with GDP and negatively correlated with Financial Innovation and Domestic Credit to the Private Sector in the long run. To encourage technical innovation in domestic small enterprises, the Government- led Innovation initiatives (GIPs) are extremely competitive initiatives that give small businesses the chance to participate in Federal Research/Research and Development (R/R&D) with the possibility of commercialization. So, the Government should pay more attention to fostering economic development.

New Development Bank as Aid Donor to School Education

Despite initial expectations that the New Development Bank (NDB) would emerge as a significant contributor to education aid, educational projects constitute only 0.3% of the Bank’s portfolio after nine years of operation. Why have the aspirations of the mid-2010s remained largely unrealized? Drawing on primary sources, including official BRICS and NDB documents, speeches by member states’ representatives, and aid statistics, this article traces the evolution of education aid within the NDB’s operational framework. The analysis tests several hypotheses to explain this trajectory, examining BRICS member states’ preferences for educational cooperation, leadership changes within the Bank, the impact of COVID-19, the demand for educational aid among NDB member states, and the division of labor between “old” and “new” multilateral development banks.The findings indicate that the inclusion of education as a secondary focus area in the NDB’s agenda initially exemplified a case of “governing through goals,” as the Bank sought to enhance its reputation by contributing to the broadest possible range of Sustainable Development Goals (SDGs). Subsequent developments, including heightened attention to BRICS educational cooperation at high-level and ministerial meetings, the adverse impact of COVID-19 on global educational progress, and the appointment of Dilma Rousseff as NDB President, further solidified social infrastructure (including education) as a priority on the Bank’s strategic agenda. However, despite increased rhetorical emphasis in declarations and strategic documents, financing for educational projects has not followed suit.This disconnect can be attributed to two primary factors. First, the established division of labor between “old” multilateral development banks (e.g., World Bank, Inter-American Development Bank, Asian Development Bank) and “new” institutions (e.g., NDB, AIIB) has positioned the former to prioritize social sector investments while the latter address deficits in infrastructure financing. Second, NDB member states have shown limited interest in altering this status quo. At the same time, stagnating aid volumes and the increasing politicization of educational aid by traditional donors, coupled with persistent needs to improve education systems in many developing countries, underscore the challenge for BRICS states to develop more effective mechanisms for educational cooperation—both within the bloc and with the broader Global South.

Editorial: Writing Quality Journal Articles

The year 2024 was marked by the rebranding of ISRA International Journal of Islamic Finance (IJIF) to International Journal of Islamic Finance and Sustainable Development (IJIFSD) following the collaboration between INCEIF University and the Islamic Development Bank Institute (IsDBI) for the publication of the journal. The rebranded title reflects a broader journal scope that includes not only the different segments of the Islamic finance industry but also covers the discourse on sustainability and sustainable development. Volume 16 Number 4 December 2024 presents the second issue published under the new title. This issue covers the following seven articles that address varied topics which fall within the scope of IJIFSD: ‘Navigating Credit Risk in Islamic Banks: A Multidimensional Analysis of Non-Performing Loans’ by Jaizah Othman and Dina Zaki Gabbori. This article addresses the issue of credit risk management in Islamic banks located across 30 countries, particularly examining traditional bank-specific and macroeconomic factors, along with under-researched areas such as the institutional environment, product development and AAOIFI membership, as determinants of non-performing loans (NPLs) in Islamic banks. ‘The Impact of Customer Perception and Religiosity on Satisfaction with Car Ijārah Financing in Pakistan: The Mediating Effect of Clarity and Accuracy’ by Farooq Ahmad Bajwa, Ishtiaq Ahmad Bajwa, Shabir Ahmad, Faiq Mahmood and Muhammad Usman Javed. This study extends the existing literature by incorporating religiosity into the customer satisfaction model for car ijārah It focuses on existing customers from the Islamic banking sector in Pakistan that availed of car ijārah financing compared to previous studies which considered random samples of customers who may or may not have used the product. ‘Analysing the Effects of Third-Party Funds and Financial Ratios on Muḍārabah Financing’ by Anna Zakiyah Hastriana. This research analyses Indonesian Islamic banks’ financial statements from 2014 to 2023 to investigate the relationship between some specific financial indicators such as third-party funds (TPF), capital adequacy ratio (CAR), non-performing financing (NPF), and net profit margin (NPM) and muḍārabah (profit sharing) financing. It adds value to the literature by considering factors which have not been extensively studied before. ‘Protecting the Well-Being of Households: Delineating a Social Takāful Fund Initiative for Positive Social Impact’ by Norazlina Abd Wahab, Mohamad Yazid Isa, Rosylin Mohd Yusof, and Wan Ahmad Najib Wan Ahmad Lotfi. This study examines an innovative social takāful fund (STF) initiative developed by the Islamic Business School–Universiti Utara Malaysia (IBS–UUM) in collaboration with FWD Takaful Berhad in Malaysia. This fund currently addresses the economic uncertainties and vulnerabilities of the marginalised communities in the State of Kedah before its programmes can be extended to other states. It positions takāful as a comprehensive community empowerment strategy to enhance social well-being and sustainable development. ‘A New Crowdfunding Model for Financial Inclusion Based on Donations and Interest-Free Debt: A Fuzzy Agent-Based Simulation Approach’ by Youssef Lamrani Alaoui, Adil El Fakir, and Mohamed Tkiouat. This study adds to the Islamic crowdfunding literature by introducing a new hybrid model that integrates donations with interest-free loans. It explores the impact of this design on crowdfunding platform success and the well-being of micro-entrepreneurs, using an agent-based perspective. ‘Exploring the Determinants of Financial Well-Being: An Empirical Study in Muslim-Majority Countries’ by Aneu Cakhyaneu, Mumuh Muhammad, Rofiq Anwar and Emre Selçuk Sari. This article contributes to the literature by examining the determinants that influence financial well-being in Muslim-majority countries, drawing from data from the World Values Survey. The measures of financial well-being involved factors such as feeling of happiness, financial satisfaction, religiosity, income, and education levels. ‘Islamic Framework for Sustainable Development’ by Kausar Yasmeen, Kashifa Yasmeen and Salem Al Abri. This article uses the systematic literature review approach to propose a comprehensive framework that integrates Islamic principles with the Sustainable Development Goals (SDGs). It seeks to fill the literature gaps by encapsulating the principles of Islamic economics in their entirety, drawing on environmental, social, and economic perspectives, including sustainable transport, green banking, urban planning, and conservation when examining the issue of sustainable development. To conclude, we wish all our readers a pleasant year-end and we look forward to more discussions on Islamic economics, banking, finance and sustainable development in our next issues, in sha Allah. Allah (SWT) is the Bestower of success, and He knows best.