Banking Practices Research Articles

Corporate Governance Practices and Performance of Deposit Money Banks in Nigeria

Performance of deposit money banks in Nigeria. The specific objective of the study was to critically appraise the relationship between size of board of directors, composition of board members, frequency of board meetings and return on assets of deposit money banks in Nigeria. The data were sourced through secondary sources from annual reports and accounts of sampled deposit money banks in Nigeria. The stated Null Hypotheses were tested through data analysis by using the correlation analysis as analytical tool. The research findings reveal that board size has a positive and strong relationship with return on assets while board composition has a positive but moderately strong association with return on assets. Furthermore, frequency of board meetings has a negative and very weak relationship with return on assets of deposit money banks in Nigeria. The implication of the findings is that increased board size could result in the improvement of financial performance of deposit money banks. The research found that such increase in number of members of the board will generate the desired outcome if it centers on independent nonexecutive directors with wealth of corporate governance experience, sound and profitable contacts, good and relevant education. The negative relationship with frequency of board meetings implies that banks should begin to trim down on number of board meetings as research has found that frequent meetings signal a crisis or distress situation with perceptions of going concern issues and bank failure. The study recommends that new independent non-executive professionals with critical governance and management attributes could be introduced into the board to improve the quality of decisions, earnings and general performance. Frequency of Board Meetings should be reduced to save cost and time while virtual meetings should be called more often than physical meetings as distance is no longer a barrier.

Loopholes in the Indian Banking System concerning Non-Performing Assets (NPAs) – A Case Study of “Axis Bank and HDFC Bank”

Abstract -The paper presents a comparative case analysis of two leading banks, Axis Bank and HDFC Bank. The rising tide of Non-Performing Assets (NPAs) in the banking sector is a major threat to financial stability and economic progress. The case study uncovered severe deficiencies in risk management, credit evaluation, and regulatory compliance, which have resulted in a considerable accumulation of Non-Performing Assets. The banks' exposure to economically sensitive sectors amplifies the impact of downturns on asset quality. The limitations in credit risk assessment underline the necessity for increased due diligence. Regulatory frameworks, such as the Insolvency and Bankruptcy Code, and prompt corrective action have a significant impact on NPA responses. The findings highlight the complicated interplay between internal banking practices, regulatory frameworks, and economic conditions that affect a bank's financial performance. Addressing discovered weaknesses inside both these banks is important to the stability of India's financial system. The implications, as indicated by rising NPAs, are felt throughout the sector, jeopardizing overall resilience. Addressing these problems is crucial for reducing systemic risks, preventing a credit crisis, and rebuilding trust in the financial industry. A better banking system is critical for India's financial stability, economic growth, and stakeholder trust. As major private sector players, Axis Bank and HDFC Bank’s successful remediation set a precedent, emphasizing the need for excellent risk management, regulatory compliance, and strategic adaptation. Key Words: Axis Bank, HDFC Bank, Non-Performing Assets, Risk Management, Regulatory Compliance, Financial Stability, Economic Impact

Redesigning the Learning Plan of the English for Islamic Banking Course

The development of Islamic Banking both nationally and globally has experienced a significant increase in both the amount of assets managed and their performance. This development is marked by the spread of Islamic banking offices and networks throughout Indonesia. Such development requires the support of human resources who have skills and knowledge related to Sharia-based banking practices as well as able to compete with the global world. In this regard, language skills, especially English language as a global language become important. Nevertheless, there is a dearth in textbooks that specifically teach people how to conduct Sharia banking practices in English. Thus, this research aims to redesign and improve the language skills of employees and prospective employees of Islamic banking through learning plans and learning objectives that suit industry needs. The present study conducted a needs analysis toward employees, lecturers, college alumni, Sharia-based bank guilds. The present study composed a textbook which consists of eight units to teach employees of Sharia-based banks to conduct banking practices in English. The learning materials are also equipped with learning objectives, aiming to improve the language skills of learners.

POLICY AND GUIDELINE ON BREAST MILK BANK: A SYSTEMATIC REVIEW

This systematic review delves into global breast milk policies, addressing their impact on maternal and child health. Recognizing the pivotal role of breastfeeding in public health, the introduction underscores the need for a nuanced examination of existing policies. The problem statement highlights gaps in current approaches, prompting the systematic review to inform evidence-based improvements. Employing a rigorous methodology, we provided a systemically review analysis based on Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) technique for virtual reality implementation. The advanced searching into two powerful databases which are Scopus and Web of Science (WoS). Based on searching, final main data, n = 63 and will be analysis using synthesis approach. The five main themes, which are decided: (1) Acceptance and Perception (2), Operational Aspects and Guidelines and (3) Impact and Practices (4) Cultural Perspectives and Historical Context, and (5) Research and Innovation. Results reveal diverse policies and guidelines available across regions, influencing human milk bank initiation, duration, and associated health outcomes. The review identifies key determinants shaping human milk bank practices, assessing their alignment with global guidelines. The conclusion synthesizes findings, emphasizing the need for context-specific policies. This systematic review offers crucial insights for policymakers, healthcare professionals, and researchers dedicated to advancing global maternal and child health through informed breast milk bank policies.

Land banking, land price and Ghana’s informal land markets: A relational complexity approach

Land banking practices have received little attention on how such practices shape informal land markets in developing countries. Drawing on a relational complexity framework, this study explores the land banking experience in Ghana’s informal land markets. This research conducted semi-structured interviews with over thirty participants from four communities within the Ghanaian informal land market. The analysis revealed that developers are banking large tracts of land as capital investments through land dispositions. The absence of development on these banked lands has created a situation where developers are gradually influencing land prices. The analysis also shows that developers have created complex ongoing relationships with customary land managers. This coalition relationship has shaped land prices through the displacement of state-mediated statutory powers for land exchanges. The study recommends revisiting of stakeholder discussions on the enforcement and monitoring of the processes required under the Ghanaian Lands Commission guidelines for large-scale land transactions.

The expanding roles of eye banks in India: Past, present, and future.

This review highlights the evolution in the scope of eye banking activities in India. The roles and responsibilities of the eye banks have expanded to match the requirements and necessities that arose because of advancements in keratoplasty techniques and the need for corneal surgeons. Adoption of different types of corneal preservation solutions and methods of donor cornea preservation was a consequence of the changing and unprecedented times. The growth of eye banking in India has been a commendable journey and has placed the country in an "almost sufficient" category in eye banking and corneal transplantation. There exists a potential to reach the status of cornea surplus country in the future. The rules and laws governing eye banking operations need dynamic amendments based on the trends in keratoplasty, surgical practice patterns, and status of self-sufficiency. Newer technological advances and quality measures must be adopted in donor cornea evaluation and tissue preparation. Research should be integrated as an important component of eye banking, especially in developing novel methods of donor preservation, and evaluating and validating the existing and changing practices of eye banking.

Investigating the effect of ESG on retail banks’ customer equity

AbstractEnvironmental, social and governance (ESG) has recently been gaining attention as an important consideration for corporate management strategies worldwide. Drawing on the literature surrounding equity theory and customer equity, this study aimed to investigate the influence of ESG on the customer equity of retail banks in Hong Kong. Based on a survey of 300 banking customers, the study found governance initiatives affected customer attitude, while environmental initiatives and social initiatives had no significant effect on it. Customer attitude provided a strong explanation for value equity, brand equity and relationship equity. Value equity and relationship equity had a positive influence on purchase intention, but the relationship between brand equity and purchase intention was insignificant. Customer attitude also mediated the relationship between governance initiatives and customer equity. The findings of this study add value to the understanding of sustainable marketing initiatives and responsible banking. The study contributes to the development of the ESG and customer equity literature and advances the implementation of sustainable banking practices. Practically, the results of this study suggest that banking practitioners should focus on governance initiatives as a primary driver of customer equity and purchase intention. Understanding the role of ESG initiatives in customer attitude and customer equity can help to develop and improve sustainable marketing strategies. Policymakers can use a governance approach to promote sustainable and responsible banking practices.

Leviathan financialized?

AbstractIn The Rise of Central Banks, Leon Wansleben provides a perceptive account of the evolution of central banking practices in the United States, the United Kingdom, Germany, and Switzerland from the 1970s through the subprime mortgage crisis and the global pandemic. Focusing on the concrete practices of monetary policymakers, Wansleben usefully explores the relationship between the development of novel techniques of monetary policy implementation and the financialization of the economy, with the paradox that the central bank appears more powerful, but exercises this power in a system that is ever more prone to crisis. While agreeing with the broad strokes of Wansleben’s analysis, I raise questions about the nature of the ‘infrastructural power’ exercised by the state through financial markets, suggesting that the growing salience of the central bank in the policymaking apparatus should not be conflated with its independent influence over the direction of economic policy.

Predictive Power of Random Forests in Analyzing Risk Management in Islamic Banking

This study utilizes the random forest technique to investigate risk management practices and concerns in Islamic banks using survey data from 2016 to 2021. Findings reveal that larger banks provide more consistent survey responses, driven by their confidence and larger survey budgets. Moreover, a positive link is established between a country’s development, characterized by high GDPs and low inflation and interest rates, and the precision of Islamic banks’ survey responses. Analyzing risk-related concerns, the study notes a significant reduction in credit portfolio risk attributed to improved risk management practices, global economic growth, stricter regulations, and diversified asset portfolios. Concerns related to terrorism financing and cybersecurity risks have also decreased due to the better enforcement of anti-money laundering regulations and investments in cybersecurity infrastructure and education. This research enhances our understanding of risk management in Islamic banks, highlighting the impact of bank size and country development. Additionally, it emphasizes the need for ongoing analysis beyond 2021 to account for potential COVID-19 effects and evolving risk management and regulatory practices in Islamic banking.

Sustainable banking and trust in the global South

AbstractTrust in banking plays a significant role in promoting financial inclusion. Multinational banks (MNBs) have the potential to enhance trust by adopting sustainable banking practices. We investigate the impact of MNBs' adoption of ESG (Environmental, Social and Governance) practices on trust in banking in 38 developing countries. Using an instrumental variable approach and control function estimation, our findings indicate that sustainable practices by commercial MNBs are positively and significantly associated with increased trust in banking. The results remain consistent across different samples, lending robustness to our findings. By demonstrating the importance of sustainable banking in fostering trust, this study contributes to the limited literature on trust in banking in the global South.

DEVELOPMENT OF RETAIL BANKING SERVICES IN THE CONTEXT OF DIGITAL TRANSFORMATION

The article examines retail banking services, their importance and how they are improving in the context of digital transformation. In the article, using the data of 14 commercial banks in Uzbekistan, the number of observations is 280. The dependent variable is the deposit practice of commercial banks, the independent variables are the credit practice of commercial banks, the remote services of commercial banks and the practice of commercial banks with plastic cards, analyzed through several models.The research shows that when we analyze 3 models based on panel data, the Random effects estimator (REE) model econometric equation of the impact of retail banking services development practices in the national economy today is Y=0.59x1+0.08x2+0.22x3-1.66 is the most optimal model. Accordingly, regarding the choice between the Fixed effects estimator (FEE) model and the Random effects estimator (REE) model, the Hausman test is used to determine which model is more suitable. The test compares the estimates from two models and tests whether the difference between them is statistically significant. If the p-value of the test is greater than the significance level (usually 0.05), then the Random effects estimator (REE) model is preferred because it allows for unobserved heterogeneity not accounted for in the Fixed effects estimator (FEE) model.In this case, the p-value of the Hausman test is equal to 0.36, which is greater than 0.05. We use the Random effects estimator (REE) model to analyze the impact of the practice of developing retail banking services in the national economy today based on panel data. We came to the conclusion that it is suitable.

Analysis of green practices for sustainability in the Indonesian banking industry

The demand for sustainability reports has increased in recent years. A sustainability report is an indicator of the company's sustainability, in which there are three elements: the environment. This research aims to analyze the role of Green Banking practices in Indonesian banking toward banking sustainability. This research examines 12 banks in Indonesia from 2015 to 2022 by using a sustainability report as a reference to the Global Reporting Initiative (GRI) standard. Data were analyzed using the PLS-SEM approach with the help of WarpPls software. The independent variable in this research is Green Practice, measured using 12 measurements, while the sustainability report index is the dependent variable. This study shows that the sustainability reporting index of banking in the environmental field is the lowest compared to the economic and social indexes. However, the sustainability report index is significantly influenced by applying green practices. This research also shows that the green banking indicators most fulfilled are adopting policies and technologies to reduce environmental damage.

Sustainable IT practices in Nigerian banking: Environmental perspectives review

This review paper aims to critically analyze sustainable information technology (IT) practices in the Nigerian banking sector, focusing on environmental perspectives. The primary objective is to identify and evaluate the extent to which Nigerian banks have integrated sustainable IT practices and the impact of these practices on environmental sustainability. The methodology involves a comprehensive review of existing literature, including academic journals, industry reports, and case studies, to gather insights into the current state of sustainable IT in Nigerian banking. Key findings reveal that while some Nigerian banks have begun to adopt green IT initiatives, such as paperless operations, energy-efficient data centers, and electronic banking services, the overall adoption rate is relatively low compared to global standards. The study identifies barriers to adoption, including lack of awareness, limited regulatory frameworks, and inadequate infrastructure. Despite these challenges, the paper highlights the potential benefits of sustainable IT practices, such as reduced carbon footprint, operational cost savings, and enhanced corporate reputation. The paper concludes that for Nigerian banks to fully embrace sustainable IT practices, there needs to be a concerted effort involving policy formulation, awareness campaigns, and investment in green technologies. It recommends that stakeholders, including government, regulatory bodies, and the banks themselves, collaborate to create an enabling environment for sustainable IT. This review contributes to the understanding of sustainable IT in the Nigerian banking sector and provides a foundation for future research and policy development in this area.

Human factors in cybersecurity: Navigating the fintech landscape

The dynamic landscape of financial technology (Fintech) introduces a myriad of challenges and opportunities, with human factors playing a pivotal role in shaping the cybersecurity ecosystem within this domain. This review explores the intricate relationship between human factors and cybersecurity in the context of Fintech, aiming to navigate the evolving landscape. In the realm of Fintech, where the fusion of finance and technology is reshaping traditional banking and investment practices, understanding human behavior becomes paramount. Human factors encompass a spectrum of elements, including cognitive abilities, decision-making processes, and user behaviors, all of which significantly impact the effectiveness of cybersecurity measures. This paper delves into the nuances of these factors and their implications for securing financial transactions and sensitive data in Fintech platforms. One key aspect of human factors in Fintech cybersecurity is the user interface design. Intuitive and user-friendly interfaces enhance security by minimizing human errors and fostering a secure user experience. Conversely, poorly designed interfaces can inadvertently contribute to vulnerabilities. This paper explores the intersection of user experience design and cybersecurity protocols, aiming to strike a balance that promotes both usability and security. Moreover, the study investigates the psychological aspects of cybersecurity awareness and education in the Fintech sector. As financial transactions increasingly migrate to digital platforms, users' awareness of potential cyber threats becomes a critical line of defense. Analyzing the effectiveness of training programs and awareness campaigns, the paper explores strategies to enhance cybersecurity consciousness among Fintech users. The research illuminates the symbiotic relationship between human factors and cybersecurity within the dynamic Fintech landscape. By comprehensively understanding and addressing human elements in interface design, user awareness, and decision-making processes, the paper aims to provide insights that contribute to the development of robust cybersecurity frameworks tailored to the evolving needs of Fintech platforms.

Green banking practices and environmental performance: navigating sustainability in banks.

The growing concerns about global climate change have thrust green banking and green finance into the forefront of discussions. The research suggests that green banking plays a pivotal role in advancing environmental sustainability. This study focuses on examining the profound impact of green banking practices on the environmental performance of banks, with a specific focus on both private and public sector banks operating in India through a survey involving 500 bank employees the study employed partial least squares structural equation modelling (PLS-SEM). The findings highlight various aspects of green banking, encompassing employee-related practices, operational procedures, customer engagement, and policy adherence, and significantly contribute to the promotion of green finance, resulting in substantial positive effects. Moreover, the study underscores the substantial and positive influence of banks' green financing on their environmental performance. Interestingly, the operational features of green banking practices emerged as having a notable impact on banks' environmental performance, whereas aspects related to employees, policies, and customers did not directly and significantly influence environmental performance. The results of the study carry significant policy implications, especially for India's banking sector, in the pursuit of environmental sustainability.

The Impact of Implementing Value-Added Tax on the Islamic Banking Practices

The main aim of this research is to determine the impact of implementing VAT on Islamic banking practices. Prohibition of Riba (interest) and Gharar (uncertainty) are the fundamental principles of Islamic banking and key differentiators to differentiate it from conventional banking practices. It was found that Riba and Gharar are the two main hindrances for the Islamic banks operating in Saudi Arabia, as these two are not endorsed by existing Sharia principles. As a result, the Islamic banks in the country leveraged Mudarabah to invest in asset development, which is supported by Sharia principles. On the other hand, rising interest rates, influenced by VAT implementation that caused a rise in commodity prices as well, led to consumers seeking less loan support. In contrast, it increased the money deposit volume of consumers. With the development of a compliance team, the Islamic banks in the country are recommended not only to enforce the practice of Standard operation procedure (SOPs ) but also to start a fee-based structure that is endorsed by Sharia principles, and it would also help banks to accumulate VAT collections through fees from customers.

Foreign Exchange Operations of Islami Bank Bangladesh Limited

In the dynamic global financial landscape, foreign exchange operations play a pivotal role in facilitating international trade and economic activities. Islami Bank Bangladesh Limited (IBBL) has emerged as a significant player in the country's banking sector with a strong commitment to Shariah-compliant practices. Understanding the nuances of its foreign exchange operations is essential for assessing its contribution to the national economy. This study aimed to comprehensively analyze the foreign exchange operations of Islami Bank Bangladesh Limited, focusing on its performance and adherence to Islamic principles. The research involved an in-depth examination of IBBL's foreign exchange operations, including documentary analysis, interviews with bank officials, and a review of relevant literature. Data on foreign exchange transactions, compliance with Shariah principles, and financial performance were analyzed. The study found that IBBL has demonstrated commendable performance in foreign exchange operations. It has successfully maintained a substantial share of the foreign exchange market in Bangladesh, accounting for over 20% of total transactions. Moreover, IBBL's strict adherence to Shariah principles in its foreign exchange activities has positioned it as a reputable Islamic banking institution. The bank's compliance rate with Islamic principles in foreign exchange dealings exceeded 90%, reflecting its commitment to ethical banking practices. Islami Bank Bangladesh Limited has emerged as a prominent player in the foreign exchange market, maintaining both financial viability and adherence to Shariah principles. Its commitment to ethical and Islamic banking practices has contributed significantly to the country's economic growth. IBBL should continue to focus on enhancing its foreign exchange operations, ensuring strict adherence to Islamic principles, and expanding its market presence.

Responsible risk-taking and the CSP-financial performance relation in the banking sector: A mediation analysis

In this study, a mediation analysis is conducted using data for 394 banks listed in 54 countries from 2002 to 2017 with the aim to investigate the role of bank risk-taking as a mediation channel to explain the CSP–financial performance relationship in the banking sector. Results show that stronger CSP is associated with improved financial performance and this relationship is partially mediated by bank risk-taking, with CSP increasing financial performance through the reduction of bank risk. Adopting more prudent—less risky or speculative—banking practices is a key method through which banks can embody social responsibility, given the systemic importance of bank stability. However, such banks tend to be more financially successful. The empirical results are consistent across various robustness checks, thereby supporting to the notion that corporate social responsibility (CSR) engagement helps banks to achieve a “win-win” situation—more profitable yet more responsible and less risky banks.

Unfair banking practices, or the theoretical and practical importance of operational risk management nowadays.

Nowadays, the management of operational risks in banking ̶ in particular conduct risks ̶ is becoming an increasingly important part of risk management. The financial crisis of 2008 and partly related to it, the Hungarian foreign currency loan crisis, have highlighted on the importance of this. Both crises were triggered, besides other reasons, by unfair banking practices and by the failure to respect the principle of fair banking. In my research I am looking for answers to the question to what extent can be considered unfair banking practices if banks impose several financial products on their customers, such as insurance and overdraft facilities, which they do not need. I will also examine to what extent the customers are aware of the fact, that they get a linked product and what it means for them in terms of risk-taking. My research consists of several parts. Firstly, I define operational and conduct risks. After that focusing on Hungary, I will examine the sales and commercial banking practices that played a role in the development of the foreign currency loan crisis, with a particular focus on the conduct risks. I will define what can be considered unfair banking practices. At the end of my theoretical overview I take into consideration why the linked products sold by today's Hungarian financial institutions are problematic and how information asymmetry drives a wedge between the bank and the customer. I also conduct primary research in the course of my research. Using an online questionnaire, I investigate the choice between current account structures of the Hungarian adult population. The results are analysed by using statistical methods.

The ESG washing in banks: Evidence from the syndicated loan market

We investigate whether banks practice environmental, social, and governance (ESG) washing in their lending decisions and how the market reacts. That is, do banks with worse ESG performance intentionally lend to firms with better ESG performance to improve their ESG reputations? Banks with worse ESG performance offer significantly lower loan spreads, longer loan maturities, fewer general covenants, and fewer collaterals to firms with better ESG performance. More importantly, the stock market generally reacts favorably to banks that make these kinds of deals, which could explain why banks engage in ESG washing. We also find that the effects of ESG washing are significantly stronger for borrowers from high-polluting industries and in the post-Kyoto Protocol period. These results support the idea that the banks with worse ESG performance use ESG-washing lending to improve their ESG reputations.