Banking Practices Research Articles

The Principles and Practices of Akad Ijarah: A Research Application in Islamic Banking

This article investigates the principles and practices of Akad Ijarah and its application in Islamic banking. Using a literature review method, this article explores the fundamental concept of Akad Ijarah and analyzes its implementation in the context of Islamic banking. The research aims to provide a deep understanding of the structure, mechanisms, and benefits of Akad Ijarah for Islamic financial institutions. The analysis results present a comprehensive overview of how Akad Ijarah is implemented in the practices of Islamic banking, as well as the challenges and opportunities it faces. These findings have significant implications for the development of Islamic banking products and services that adhere to Shariah principles. In conclusion, this research highlights the importance of a solid understanding of Akad Ijarah in ensuring the compliance of Islamic banking with Shariah principles.

A bibliometric analysis of Islamic banking sustainability: a study based on Scopus scientific database

PurposeThis paper aims to analyze the scientific trend of research on Islamic banking sustainability (IBS) through a bibliometric study. In particular, the paper extensively investigates all the articles issued through the Scopus database regarding the IBS.Design/methodology/approachThe authors discovered 76 papers that met the function, subject and set requirements by using the phrase IBS. The authors used VOSviewer as an analytical tool and the Scopus website.FindingsIBS publications were found in the period 2005–2022, and the publication trend of IBS research demonstrates that it is growing exponentially after 2018. Malaysia is the leading country in terms of productive authors, universities, number of documents, citations and collaboration research on IBS. The current research trends are summarized into five cluster maps for future research directions: sustainability measurement, sustainability practices, risk and governance, corporate social responsibility (CSR) and IBS theory. The Maqashid al Shariah approach conceptually influences the framework for constructing the dimensions and indicators used to measure the IBS.Research limitations/implicationsThe authors retrieved data for their research from the Scopus database; using other databases might result in totally different research patterns with this IBS bibliometric research.Practical implicationsThe research encompasses valuable implications for Islamic banking as it offers valuable insights on how to assess the performance of IBS. Particularly, it contributes to identifying the dimensions and indicators needed to measure IBS performance. Furthermore, this research provides strategic initiatives to promote sustainable practices in Islamic banking in terms of green financing taxonomy, services, operations, risk management and governance.Social implicationsThis research is valuable for other scholars as it offers a foundation for the future growth of IBS research, focusing on important sustainability clusters obtained from selected reputable journals. This research is beneficial for regulators in enhancing the roadmap for establishing and enhancing long-term IBS with impacts on socio-economic, environmental and governance.Originality/valueThe study presents a concise review of the bibliometric study in IBS and provides recommendations for future research directions in cluster mapping of themes and subthemes. There is still insufficient research that examines the IBS, in particular, complete insights into the IBS literature review.

CRM Practices in Private Commercial Banks, Influencing Long Term Relationship and Customer Centric Holistic Approach

CRM Practices in Private Commercial Banks, Influencing Long Term Relationship and Customer Centric Holistic Approach

Cybersecurity Practices in Cryptocurrency and Traditional Banking: An Analysis of Evolving Threats and AI Solutions

Cybersecurity Practices in Cryptocurrency and Traditional Banking: An Analysis of Evolving Threats and AI Solutions

Prospects for Digitalization of Retail Lending Practice in Banks of the Republic of Uzbekistan.

Prospects for Digitalization of Retail Lending Practice in Banks of the Republic of Uzbekistan.

Navigating the Moral Compass: Business Ethics in the Banking Sector

Abstract The banking sector appreciates business morals greatly; additionally, research has been done to find out their effects on organizational success capacities, stakeholders’ trust and the general stability of the financial system. This is a time of increased intricacy and interrelation which means that financial companies like banks especially worldwide’ economic systems being backbone must be ethically sensitive. The paper examines many aspects of corporate morality while applying them within bank operations one such area being transparency where all things done openly without concealment another fairness between different people so none feels oppressed lastly among others CSR which includes activities that benefit not only customers but also employees or even community. Based on a thorough investigation into academic literature, this article explains the real advantages of moral practices in banking. It looks at how ethical behavior encourages lasting customer loyalty and support from other stakeholders as well as strengthens financial institutions’ ability to endure. Moreover, ethical tests that banks come across during this era of technology are outlined while focusing on implications brought about by advanced systems towards data privacy, cybersecurity and fair lending measures. The urgency for the banking sector to take up and firmly establish moral considerations is underscored in this document, which evaluates reputational damage caused by moral breakdowns within the industry as well as on wider economy scale. The development and implementation of robust ethical frameworks are required, which are built on effective control systems to minimize the risks of unethical behavior in banks’ operating activities. These research findings contribute to the ongoing discourse on the place where business ethics and the banking sector intersect. The comprehension obtained can aid in decision making for policies, laws or strategies by financial institutions that want to foster integrity and responsible entrepreneurship.

Basel framework for corporate governance of banks

The Basel framework for bank corporate governance is a set of international guidelines and standards established by the Basel Committee on Banking Supervision, which plays a crucial role in setting the corporate governance practices of banks around the world, actively contributing to improving stability, risk management and compliance with national and international regulations applicable to banks. This regulatory framework outlines the principles and requirements related to risk management, capital adequacy, internal controls, transparency of bank shareholders and customer relations, but there is a strong emphasis on board oversight, accountability and the alignment of incentives with long-term sustainability. Banks are currently implementing Basel IV - the continuation of Basel III standards, developed in response to the deficiencies in financial regulation revealed by the 2007 financial crisis, with the aim of strengthening bank capital requirements by increasing minimum capital requirements, holding high-quality liquidity and decrease in bank leverage.

Climate risk and financial stability: Assessing non-performing loans in Chinese banks

Climate change poses significant challenges across various sectors, particularly within the financial realm, where the stability of banking systems is paramount. Non-performing loans (NPLs), as critical indicators of financial health, may be considerably influenced by climatic factors. This study delves into the impact of climate change on NPLs within the Chinese banking sector from 2010 to 2022, focusing on the influence of greenhouse gas (GHG) emissions. Utilising a comprehensive dataset and advanced econometric models (including panel quantile regression, sensitivity analysis and balanced panel data models), this research illuminates the intricate relationship between environmental changes and financial health. The research also discovers a significant climate change impact on NPLs, with increased GHG emissions leading to varied responses among banks. This variation reflects the different risk profiles and adaptive capacities of banks to climate-related financial risks. Banks demonstrating higher adaptability to climate change exhibit lower NPL ratios, underscoring the importance of strategic risk management and proactive adaptation in the banking sector. The research significantly advances the understanding of the financial implications of climate change and the interplay of climate variables with financial stability. It offers crucial insights for policy makers and banking institutions, emphasising the need to integrate climate risk into financial decision making and develop robust climate-resilient strategies for the banking sector's protection. In conclusion, the study enriches the discourse on the financial impacts of climate change and serves as an informative guide for stakeholders in navigating and addressing these emerging challenges. It underscores the necessity of embedding environmental considerations within banking practices to promote a resilient and sustainable financial system in the face of environmental uncertainties.

The Application of Value-Based Intermediation Through Waqf in Islamic Banking

The Islamic financial industry has experienced an exponential transformation that has contributed greatly to the national economic growth. Malaysian Islamic finance is considered one of the most comprehensive Islamic financial systems in the world. Bank Negara Malaysia (BNM) has introduced a new concept of Value-Based Intermediation (VBI). This banking practice focuses on profit and supports social values for a sustainable economy, community, and environment. This study discusses the involvement of Bank Muamalat Malaysia Berhad in waqf development, focusing on business activities in line with VBI. This qualitative study applied document analysis and semi-structured interviews and found that Bank Muamalat Malaysia Berhad is an Islamic banking institution that bases its existence on commercial profits and is able to implement activities related to waqf development, such as cash waqf collection and waqf project financing consistent with VBI.

Influence of Service Quality and Company Image on Customer Satisfaction

Banking, as a financial organization primarily engaged in the collection and redistribution of public funds, must establish a robust banking system. Consequently, it is necessary to regulate and supervise banking operations to ensure the adoption of sound banking practices. Since the implementation of the OJK Law on 22 November 2011, the oversight of financial services institutions in Indonesia has shifted from multiple institutions to a single institution, the OJK. Previously, banking supervision was conducted by Bank Indonesia, while Bapepam handled the supervision of capital markets and other financial institutions. The objective of this study is to ascertain customer happiness, which is influenced by the quality of service and the organization's image. This research employs the descriptive and verification analytic approach, focusing on the 92 respondents who are customers of Bank Negara Indonesia. The processing and research are categorized into two distinct types: secondary data from the company and primary data from the questionnaire responses; in-depth analysis is also done, which seeks to provide a comprehensive understanding of how service quality and corporate image impact customer happiness. According to the research findings, Service Quality is pretty good, with an average rating of 3.23. Company Image is also considered quite good, with an average rating of 3.18. Similarly, Customer Satisfaction falls into the pretty good area. Its mean value is 3.10. Service Quality (X1) significantly influences Customer Satisfaction (Y) with a total influence of 0.334. Similarly, Company Image (X2) also significantly influences Customer Satisfaction (Y) with a total influence of 0.484. When both Service Quality (X1) and Company Image (X2) are considered together, they have a combined influence on Customer Satisfaction (Y) with a determination (R2) of 0.818 or 81.8%. The remaining 18.2% of the influence on Customer Satisfaction (Y) is attributed to other variables that were not examined. The research findings confirm a strong correlation between Service Quality and Company Image Customer Satisfaction in a banking company in Garut.

Guest editorial: Perspectives on sustainable practices in banking

Guest editorial: Perspectives on sustainable practices in banking

Islamic Banking in Africa: A Booming Market with Growing Pains

Islamic banking, also known as ethical banking, is a banking system for those who avoid conventional banking due to religious beliefs. It drives the creation of new financial instruments that meet the needs of a wider range of customers, and it is currently accepted as an essential banking model in the global financial landscape. This paper assesses the opportunities and challenges of Islamic banking in Africa using a systematic literature review by examining 19 articles. The paper argues that Africa is the original home of modern Islamic banking practices, and it can become an essential hub for this banking model in the future. The results demonstrate that the Islamic banking market has potential for those seeking expansion and the establishment of Shari’ah banks, as well as promising avenues for the growth of Islamic banking and finance and aligning with the continent's socio-economic dynamics by providing inclusive financial solutions. The findings also demonstrate the existing opportunities, including the large Muslim population, arguing that popularity can drive Islamic banks on the continent, while limited awareness, misconceptions, and legal restrictions are the main challenges for Islamic banks in Africa, hindering public understanding of how Islamic banks work. The paper recommended that Islamic banks should conduct market research, create innovative products, and apply tailored marketing strategies. The study also suggests that governments should recognize Islamic banks as distinct financial institutions in order to better support them.

Empirical Study on Procurement Planning Practices and Procurement Performance of Centenary Bank, Uganda

Purpose: Commercial banks have over time had procurement performance challenges owing from the poor procurement planning as reported in different procurement management literature. This study was carried out to examine the relationship between procurement planning and procurement performance of Centenary Bank Mapeera (CBM). Materials and Methods: Cross sectional survey research design was used to collect both quantitative and qualitative data from centenary bank team leaders, tender committee members, procurement officers, legal officers, procurement and disposal unit staff, credit officers, branch management officers and from prequalified suppliers and provider’s FY 2022/23. From a total population of 190 employees, a sample size of 129 was determined using Slovin’s (1965) formula. Specific random and none random sampling techniques were used to select respondents. Data was collected using questionnaires and interview guide and was analyzed using correlation and thematic analysis techniques. Findings: The findings displayed in the correlation analysis results for CBM (r = 0.653, p<.01) show a significant positive relationship between the predictor variable and the outcome variable. Specifically, budgeting and procurement performance at CBM were positive and significant (r =0.532, p<.01); needs assessment and procurement performance were significant and positive (r =0.484, p<.01); however, for contract administration and procurement performance the relationship was positive but none significant (r =0.613, p>.05). The likely explanation here could have been the fact that entities are geared towards cost reduction at the cost of quality improvement which would be possible through procurement planning. Implications to Theory, Practice and Policy: From this study it is envisaged that commercial banks which institute systematic procurement planning systems would realize improvement in procurement performance. Keywords: Procurement, Performance, Central Bank, Uganda, Planning JEL Classification Codes: H32; H57; J18; L91; M21;

The mediating role of stakeholders on green banking practices and bank's performance: The case of a developing nation.

The banking sector serves as a nudge between increased financial investments and reduced environmental impacts in the modern era of sustainability thus, integrating the social, environmental, and economic dimensions. This paper aims to explore the practices and ongoing activities on account of sustainable banking which is being practised in the Pakistani Banking Sector. A mixed methods approach using a survey with a sample size of (n = 250) and in-depth interviews of (n = 25) provides significant evidence for the research. SmartPLS4.0 was used for hypotheses testing and to ascertain the path coefficient association within the constructs. This research fills the gap in existing literature by testing and implying the mediating role of Stakeholders' Influence on the relationship between Green Banking Practices and the Bank's Performance. The results of the quantitative analysis show a positive association between variables, highlighting the role of stakeholders and their need to partake efficiently, in the countrywide execution of green banking. The qualitative analysis portrays that; green banking is currently the partial focus of the banking sector in the developing economy of Pakistan whereas, approaches like financing green projects, investments in renewable energy, in-house greening of the banking sector, and provision of easy lending facilities to encourage and support environmental initiatives are some commonly practised accomplishments of the banking sector.

Exploring the nexus between banking stability and market value: Evidence from the Iraqi banking sector

Purpose: This study aims to investigate the relationship between banking stability and market value in the Iraqi banking sector, exploring how the stability of banks impacts their market capitalization. Methodology: The study employs a quantitative approach, utilizing financial ratios such as return on assets, equity/assets, and the z-score index to quantify banking stability. Market value is measured using banks' share prices and outstanding shares. A sample of 17 Iraqi banks is analyzed over a four-year period, employing statistical analysis to examine the relationship between banking stability and market value. Results: The findings reveal a positive relationship between banking stability and market value. Banks with strong risk management practices, adequate capital buffers, and effective regulatory oversight inspire greater confidence among depositors and investors, translating into higher market valuations. Conversely, banks facing poor governance, high non-performing loans, and thin capital cushions struggle to achieve stability, eroding their market value. Theoretical Contribution: The study contributes to the existing literature by providing empirical evidence on the crucial role of banking stability in shaping market valuations. It highlights the importance of sound banking practices, regulatory frameworks, and risk management in enhancing investor confidence and, ultimately, the market value of banks. Practical Implications: The findings offer insights for policymakers, regulators, and financial institutions in Iraq and other regions. Promoting banking stability through enhanced prudential oversight, governance practices, risk management capabilities, and financial inclusion can favorably impact the market valuation and development of the banking system.

Indonesia Transport Loan Projects: Development Outcome Attributions (DOA) on Unemployment, Growth, and Poverty

Our goal was to investigate the effects of international development banks' foreign exchange loan-funded transportation projects. We examined the effects and efficacy of Indonesia's transport loan projects, which were supported by the World Bank and the Asian Development Bank (ADB), to achieve this, 67 projects of $8.85 billion in value were undertaken between 1972 and 2020. This study is significant because it is the first in the history of development assistance—after 100 years—that is based entirely on banking theories and practices, employing attribution techniques and presuming that all loans will be disbursed into Indonesia's economy. Nevertheless, the effectiveness narratives are untrue because—after being converted into Rupiah—less than 10% of the loan fund made it to Indonesia's economy. According to our analysis, the loans from both banks decreased growth by 200% and increased poverty by 220%, even if they were successful in providing jobs. The disbursement delays of five to seven years result in capital outflows of more than $26 for every $1 loan. Fixing this necessitates a 100% payout in Rupiah into Indonesia's national banking systems the same year that the loan agreements are executed.

NEED FOR EFFECTIVE TALENT MANAGEMENT PRACTICES IN BANKING -A BIBLIOMETRIC ANALYSIS

Over a decade the banking practices in the country has been experiencing sea change with the implementation of number policy related changes, rise in privatisation and also due to technology upgradations. Modern-day banking activities have become more complex and complied with high-end technology intervention. It makes bank employees more sensitive towards their job. Thus, retain the existing work force with required skill sets is a dauting task for the administrations of banks. Talent management activities of banks generally revolve around employee engagement monitoring their performance, establishing connectivity between employee and the banking institution and they’re by achieving bank’s goal. It is concluded that talent management is an emerging issue and most focused topic in Indian banking sector. This task compliance with stringent procedures and time consuming too. Hiring talent in this pursuit and retaining them involve myriad steps to make the employees i.e., stimulate them to learn new concept and practice it in their day-to-day work adopt continuous training and monitor the performance of the employees KEY WORDS: Talent Management, Public Sector Banks, Private Sector Banks, Competition

Banking for the Culture: Black-owned banks as cultural assets during the subprime lending boom

Today, black-owned banks are important financial resources challenging economic exclusion. Nevertheless, they do not associate strongly with building black wealth. Some scholars argue this signals black-owned banks are ornamental, or ineffective responses to legacies of economic exclusion in black segregated neighborhoods. To engage these critiques, I draw on the dialectical theoretical frames of cultural assets and structural deficits to examine the effectiveness of black-owned banks during the subprime lending boom—a period when bank practices exploiting a history of economic exclusion in black segregated neighborhoods intensify. Specifically, I analyze administrative data from the Federal Deposit Insurance Corporation (FDIC) and the Home Mortgage Disclosure Act (HMDA) to assess whether black-owned banks associate with access to mortgage credit when the subprime lending boom peaks in 2006. Using propensity score matching with inverse probability weighting, I find black-owned banks do not associate with mortgage originations in 2006; but neighborhoods with black-owned banks receive fewer subprime mortgage loans, compared to matched ones without them. As such, black-owned banks appear to effectively shield black segregated neighborhoods from the time period's predation. Overall, findings imply black-owned banks support protective credit markets during periods of intensifying economic exclusion and exploitation.

Fintech's influence on green credit provision: Empirical evidence from China’s listed banking sector

We explore the impact of financial technology (fintech) advancements on green credit provision, investigating publicly traded banks in China from 2007 to 2022. We particularly focus on credit modelling innovation, examining the non-linear dynamics between fintech evolution and green credit distribution. Results reveal a positive U-shaped correlation. Initial stages of fintech are associated with increased green credit risk, negatively affecting the volume of green credit. However, more established fintech infrastructures significantly enhance green credit volumes by improving resource allocation and credit risk assessment. Utilizing a multiple linear regression approach, we highlight the transformative nature of fintech in advancing sustainable banking practices, particularly through innovations in credit modeling that enhance green credit risk management and resource allocation efficiency.

Green Banking Initiatives: Policy and Practices in Commercial Banks of Nepal

Environmental and social (E&S) risk management has grown in key aspects of sustainability in banks and other financial institutions these days. A socially inclusive, climate-friendly and green banking system is only possible with the effective management of E&S risk in their business transactions. This study assesses the present implementation status of sustainability within commercial banks in Nepal, by examining their adherence to the environment and social risk (ESRM) guidelines issued by Nepal Rastra Bank (NRB). Using a descriptive research design, the study utilizes ESRM reports published by NRB in 2078/79 and 2079/80. The study examines the present state of ESRM guideline implementation across three key aspects of policy formation, training and development activities for bank employees, and incorporation of environmental and social risks within the core strategies of commercial banks. The result found a satisfactory level of implementation of ESRM guidelines. The policy formulation and governance indicators are almost realized and other indicators have satisfactory and progressive levels of operation in the banks. Effective implementation of sustainable guidelines and initiatives will be accomplished innovative financial instruments that incentivize green investments and support climate-resilient practices can further expedite the transition to a sustainable banking landscape. Overall, this study offers valuable insights into the current state of ESRM in Nepal's commercial banks, shedding light on the progress that can pave the way for a more sustainable and green financial system in Nepal.