Principles Of Banking Research Articles

Value-based banking as a factor of sustainable development

The banking sector is one of the drivers of economic development and is closely related to the functioning of society, the demands of which change according to its evolution. In the era of public demand for guidelines regarding the conscious conduct of business and life, the question of introducing values into banking is acute. Its transformation in the direction of introducing a personal approach and ethical principles while working with clients is being observed; awareness that the formation of close relationships is possible only on the basis of socially significant values and assessment of their impact on the environment, communities and space. That is why the implementation of a value-based approach to banking is an impor­tant and relevant topic. During the re­search, a hypothesis was put forward regarding the need to introduce value-based banking as one of the key drivers of sustainable economic develop­ment. A traditional set of methods for researching economic processes is used: ana­lysis, comparison, and logical genera­lization. The essence and basic norms of the functioning of value-based banking are revealed, the authorʼs vision is formulated. The work prin­ciples of value-based banks, defined by the Global Alliance for Banking on Values, the principles of the concept of sustainable develop­ment, the practical aspects of the implementation of value-based banking based on target, ethical characteristics in the work of individual banking institutions were studied, and on their basis, the own principles of value-based banking were formulated. The main interna­tional and domestic aspects of the functioning of banks that introduce elements of value-based banking are analyzed. It was determined that in fact all the leading banks in the world banking sphere prioritize streng­thening the principles of value banking in the near future. Banks of Ukraine are not lagging behind this process, and certain elements of value-based banking, such as corporate social responsibility, ESG prin­ciples, etc., are being introduced into their activities. The prospects of banking based on a client-oriented approach and the application of the principles of conscious business conduct are formulated.

Impact of Economic Crises on Banking Sector Performance- A Comparative Analysis of Conventional and Islamic Banks Across OIC Countries

This study investigates the impact of three significant economic crises—the Eurozone Debt Crisis (2010-2012), the COVID-19 Pandemic (2020-2021), and the Post-Pandemic Economic Recovery (2021-2022)—on the performance of conventional and Islamic banks in Organization of Islamic Cooperation (OIC) countries. Using a dataset of 4,381 observations from 34 OIC countries, panel regression techniques are employed to evaluate the influence of these crises on key financial performance metrics: Return on Shareholders' Funds (ROSF), Profit Margin (PM), Return on Total Assets (ROA), Current Ratio (CR), and Solvency Ratio (SR). The analysis reveals that while the Eurozone Debt Crisis did not significantly affect bank performance, the COVID-19 pandemic led to a notable decline in profitability but an improvement in liquidity. The results highlight that during the COVID-19 pandemic, banks faced substantial challenges in maintaining profitability, as evidenced by the significant decrease in PM. However, the improvement in CR suggests that banks enhanced their liquidity management strategies to cope with the crisis. The Post-Pandemic Economic Recovery phase brought positive changes in both profitability and liquidity, demonstrating the ability of banks to adapt and thrive as economic conditions stabilized. Macroeconomic variables, such as GDP growth and inflation, played crucial roles, with GDP growth positively affecting ROSF and inflation negatively impacting PM. These findings underscore the importance of a diversified banking system, including both conventional and Islamic banks, to enhance financial stability. Policymakers and financial regulators should consider the unique strengths of Islamic banking principles in regulatory frameworks and prioritize sound macroeconomic policies to promote stability and resilience in the banking sector. Future research should further explore the long-term impacts of economic crises on bank performance across different regions and banking models, as well as the interaction between regulatory environments and bank resilience. Keywords: Economic crises, bank performance, conventional banks, Islamic banks, OIC countries, COVID-19 pandemic, Eurozone Debt Crisis, post-pandemic recovery, financial stability, macroeconomic factors.

STRATEGI DIVERSIFIKASI PORTOFOLIO: ANALISIS DAMPAK RISIKO DAN KEUNTUNGAN PADA BANK KONVENSIONAL DAN SYARIAH MILIK NEGARA DI INDONESIA

This research examines the relationship between credit portfolio diversification and the risk and return of state-owned banks (Bank BUMN) from 2019 to 2023. Using multiple linear regression analysis, it evaluates the impact of the Herfindahl Hirschman Index (HHI) on credit or financing risk (NPL and NPF) and bank returns (ROA, ROE) among state-owned banks listed on the Indonesia Stock Exchange. Control variables include bank size, loan or financing to deposit ratio (LDR and FDR), and equity to total asset ratio (ETA). The results show that credit portfolio diversification reduces credit risk in BUMN banks, suggesting that spreading credit exposures across sectors can mitigate risk. However, diversification does not significantly affect bank returns (ROA, ROE). Control variables such as bank size, LDR and FDR, and ETA show no significant impact on credit risk, ROA, or ROE. This study provides empirical evidence on the effectiveness of financing portfolio diversification in managing credit risk within state-owned banks, considering Islamic banking principles. While diversification can mitigate credit risk, its impact on profitability requires careful consideration. BUMN banks should implement robust risk assessment frameworks and strategic oversight to maximize diversification benefits while maintaining financial stability and adhering to ethical and Sharia-compliant financial practices.

Reconstruction of the Mudharabah Financing Agreement at Bank Syariah Indonesia

This research was motivated by the lack of maximum mudharabah financing due to the high risk experienced by Islamic banking. In addition, Islamic banks are extra careful in channeling mudharabah financing. This study aims to find out what the results of the reconstruction of mudharabah financing look like. Relating to rebuilding the mudharabah contract, the aims and practices align with what is determined in accordance with the basic principles of Islamic banking. Researchers use qualitative phenomenological approaches that are descriptive, analytical and inductive. This research seeks to explore data to find the basics of phenomena, reality and experience. This research uses documentary studies and studies of theories to explain and conclude the problems raised. This research is descriptive, which means it describes or describes a situation, symptoms, and events. In this case, to find out problems related to the status of Islamic banking as shahibul mal in the mudharabah contract that occurred at Bank Syariah Indonesia (BSI) Regional South Sulawesi. From various related information, from references that discuss mudharabah transactions and their application in Islamic banking that occur at Bank Syariah Indonesia (BSI) South Sulawesi Regional. This study concluded that the reconstruction carried out at BSI still did not go as expected. There are still many obstacles faced, including in determining profits. Meanwhile, the mudharabah contract applied at BSI is free from maysir, gharar, and usury elements—Mudharabah financing practices. The profit-sharing ratio given to mudharabah financing benefits both banks and customers. Profit sharing system where operational costs must reduce the profit earned by the fund manager and must also return the funds provided by shahibul maal therefore the profit obtained by the mudharib is by what is agreed. Various customers have felt this financing because customers who previously did not have the capital to do business with this financing customers can have capital provided by the BSI Regional South Sulawesi Bank. In practice, the distribution of profits between the two parties is based on a pre-agreed ratio. The ratio is the share of business profits for each party whose amount is determined based on the agreement. The partnership relationship in mudharabah financing is a collaboration between shahibul maal to provide funds. In contrast, the other party, mudharib, provides his mind, energy, and time to manage the cooperation business. The most important element in mudharabah financing cooperation is trust. This belief is mainly from shahibul maal to mudharib. Shahibulmaal should act as a supervisor to the mudharib to avoid business risks. The author advises BSI always to supervise customers when managing funds provided by banks in order to create transparency between the bank and customers. The bank should analyze the character and ability of prospective customers first before providing financing to customers to run a business and manage the funds provided by the bank, in order to minimize losses obtained by shahibul mall and can establish transparent cooperation and in accordance with Islamic economic principles

BANKS’ COMMITMENT TO THEIR PRINCIPLES AS A STRATEGY TO ENHANCE CUSTOMER LOYALTY: THE MODIFYING ROLE OF BANKING TALENT

The study seeks to realize the role that the presence of banking talent plays in enhancing the relationship between commitment to banking principles and customer loyalty. To achieve this goal, SPSS program (version 26) was used to analyze the data collected through a questionnaire, distributed to a sample of 160 customers, who were systematically selected from Dasnia Bank in Dohuk Governorate, represented by the human resources working in the presidency of Duhok Polytechnic University, Technical College of Engineering, and Technical Institute in Sinjar, where human resources deal with Dasnia Bank. Totally, 153 copies of the questionnaire were received to analyze the data statistically between banks’ commitment to their principles (independent variable) and customers’ loyalty to banks (dependent variable), as well as the modifying variable determined by the presence of banking talent. Based on the results of the analysis, a number of conclusions were reached. The findings indicated that Dasnia Bank follows good banking practices, which makes customers more loyal. It also helps if there are good bankers in the company. Therefore, it is important to have someone who has the skills, abilities, and experience needed to work in banking. This helps banks stay true and loyal to their principles. Finally, the study recommended the need for Dasnia Bank and other banks to rely on the default model, which succeeded in clarifying a relationship of influence of banks commitment to the principles on the loyalty of customers.

Legal Staffing Methods in Resolving Non-Performing Loans in the Banking Industry Based on Prudential Banking Principles

Legal Staffing Methods in Resolving Non-Performing Loans in the Banking Industry Based on Prudential Banking Principles

SUSTAINABLE FINANCE AT THE GRASSROOTS: INSIGHTS FROM KARNATAKA'S GREEN BANKING LANDSCAPE

In addition to global environmental challenges, sustainable finance has emerged as an important tool for reducing environmental risk and promoting economic growth. The study examines the development of sustainable finance at the grassroots level through an analysis of green banking initiatives in Karnataka, India, with special focus on Vijayapura district. The main objective of this study was to reveal the complex interplay between sustainable finance and community engagement through consumer knowledge and perception of green banking practices in the local context of Karnataka. Using mixed methods, the study combined quantitative surveys with qualitative interviews to critically examine the state of green banking awareness among consumers in Vijayapura district. The survey had collected data on customer demographics, knowledge of green banking principles, and attitudes towards a sustainable economy. In-depth interviews further clarified the factors affecting consumer participation in green banking schemes. Preliminary findings indicate that consumers in Vijayapura district differ in their awareness and understandings of green banking principles. While some respondents show a keen interest in sustainable finance and are willing to participate in green banking activities, others express limited knowledge or skepticism about its benefits about factors such as education; income and access to information emerge as significant determinants of customer perceptions and behaviors towards green banking. This study contributes to the evolving discourse on sustainable finance by providing insights into the implementation of green banking systems on the ground in Karnataka, India. By highlighting the opportunities and challenges associated with community engagement in the sustainable economy, the findings connect policymakers, financial institutions, and communities seeking to promote the environment the norms of sustainability and inclusive economic growth.

Role of Islamic Banks in Increasing Financial Inclusion: A Systematic Literature Review

This article investigates the contribution of Islamic banks to enhancing access to financial services by looking at their unique method of offering Sharia-compliant goods and services. Islamic banking principles, the study claims, encourage profit-and-loss sharing and forbid riba (interest), which increases access to financial services, particularly for devout Muslims. In particular, this paper looks at how Islamic banks affect financial inclusion in Southeast Asia, the Middle East, and North Africa. This is accomplished by assessing academic literature, industry reports, and statistical data. It looks at potential substitutes, including mobile banking and microfinance, to reach those who need access to traditional banking services and delves into the difficulties Islamic banks have, such as a lack of knowledge about money and location. Data indicate that Islamic banks support economic development and stability by establishing trust via Sharia governance structures. In its last part, the report offers some suggestions on how governments may utilize Islamic banking to increase public access to financial services and promote social change.

Analysis of the Implementation of Prudential Banking Principles in Providing Business Capital Financing and its Impact on the High and Low Risk of Non-performing Financing (Study at BPRS Metro Madani Head Office)

The prudential principle is crucial to the continued success of the business. As far as giving support in light of Sharia standards and completing different activities, banks need to make strides that do not hurt the bank and the interests of clients who share their assets with the bank. And, banks are expected to work as per prudential standards. This study employed descriptive qualitative research, which falls under the category of field research. Information sources in this study utilized essential information acquired through meetings and auxiliary information such as true records, diaries, and other writing. The results showed that the implementation of the prudential banking principle in business capital financing at BPRS Metro Madani Head Office is by using feasibility analysis 5C + IS, 7P and setting the maximum limit of fund disbursement. The application of good prudential principles has a positive and good impact on the bank. This is evidenced by the decline in the level of problematic financing in BPRS from year to year. Keywords: prudence principle, problem financing, NPF

Ziyadah from an Islamic Perspective (Case study at BMT Al-Rifa’ie)

Islamic banking principles emerge primarily from the unequivocal prohibition of riba (usury) in the Quran. The Indonesian government has bolstered Islamic banking with legal frameworks, beginning with Law No. 7 of 1992, later replaced by Law No. 10 of 1998, providing a robust legal basis for its operations. The evolution of Islamic banking in Indonesia started with the establishment of Bank Muamalat Indonesia (BMI) on November 1, 1991, which catalyzed the rise of Islamic financial institutions such as Baitul Maal Wa Tamwil (BMT). Interest (riba) is forbidden in Islam due to the additional or ziyadah interest charged on loan transactions. BMT, operating as an Islamic financial institution, eschews interest in favor of profit-sharing systems. The Indonesian Ulema Council (MUI) has issued several fatwas related to ziyadah, including MUI Fatwa No. 1 of 2004. This research, conducted at BMT Al-Rifa’ie, adopts a qualitative approach with a historical hermeneutic analysis. Informants include seven individuals from management, customers, and the MUI. The study concludes that the ziyadah practices at BMT Al-Rifa’ie align with Islamic principles.

PENERAPAN PRINSIP PRUDENTIAL BANKING PADA PEMBIAYAAN KREDIT USAHA RAKYAT MIKRO: STUDI PADA BANK SYARIAH INDONESIA CABANG BANDA ACEH

Kredit Usaha Rakyat (KUR) is a credit facility to middle to lower class customers that issued by banking industries in Indonesia, which focusses on aspects of livestock, trade, and agriculture. PT Bank Syariah Indonesia, Banda Aceh is one of bank company which issues this product and always applies prudent banking principles, especially in financing. The application of the prudential principle is carried out starting from the beginning of the debtor applying for credit analysis of KUR financing until the financing is paid off. This type of research is a qualitative descriptive approach through case studies. The result finds that the application of prudential banking principles applied to the company can be seen from the various provisions set by Bank Indonesia. The provisions of the prudential principle are the Capital Adequacy Ratio (CAR), namely the maximum credit provision (Maximum Lending Limit), the allowance for productive asset liabilities, and the provisions that regulate banking itself. The company can be seen from non-performing loans, it seems that their non-performing loans originated from year to year are increasing even though they have implemented the prudential principle, but there are still non-performing loans.

Relationship of Environmental Disclosure of Renewable Energy, Carbon Emissions, Waste Management, Water Consumption, and Banks’ Financial Performance

In recent years, sustainable banking principles have been employed in the daily operations of deposit money banks in Nigeria. This study examines the relationship between environmental sustainability and the financial performance of 14 deposit money banks listed on the Nigerian Exchange Group. It focuses on the impact of environmental disclosure of renewable energy, carbon emissions, waste management, and water consumption (i.e. proxies for environment sustainability) on the bank’s return on assets (ROA i.e. proxy for financial performance). The research spans an 8-year period from 2013 to 2021, using panel data and multiple regression analysis to analyze the data. The data is collected from the annual reports of the deposit money banks listed on the Nigerian Exchange Group. The research design is ex-post facto, utilizing secondary data collection methods. The findings suggest that there is a positive but insignificant association between environmental sustainability indicators (renewable energy, carbon emissions, waste management, and water consumption) and financial performance (ROA). In conclusion, the study finds no significant relationship between and financial performance (ROA).

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.

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.

Иерархическая система ранжирования коммерческих банков

Introduction. The main objective of the study is to develop economic and mathematical tools for constructing a rating barometer of Russian commercial banks according to the level of sustainability in a long term view using a hierarchical decision-making structure. Theoretical analysis. The method of commercial banks’ integral ranking is based on a system of hierarchical analysis. The methodology is based on ranking indicators and dividing them into subgroups. The priority indicator indicates the ranking vector, two levels of data ranking are performed, and subindices are formed. At the last stage, a convolution into an integral index is performed. The mathematical apparatus of a tree-like solution structure is used; the assumption of the method is the choice of priority indicators based on the principle of a commercial bank’s long-term sustainability. Empirical analysis. An algorithm has been compiled for condensing primary financial reporting indicators into an integral indicator. The methodology was tested on data from Russian commercial banks. Results. A mathematical apparatus is presented that makes it possible to assess the long-term financial stability of commercial banks according to their key indicators, an integral rating of banks is constructed for financial stability and investment attractiveness. The hierarchical rating system of commercial banks developed by the authors characterizes the analyzed banks by the size of the bank’s own funds, capital structure and return on equity.

ENHANCING GREEN BANKING PRACTICES IN INDIAN ECONOMY

In the framework of sustainable development and environmental preservation, the Indian economy essentially should embrace green banking methods. An overview of the main goals and consequences of integrating green banking principles are proposed in this abstract. It highlights the necessity of encouraging investments in sustainable initiatives, coordinating financial decisions with environmental concerns, and improving disclosure of environmental and social hazards in a transparent manner. Adopting green banking is becoming strategically necessary as India aspires to economic progress in order to maintain a sustainable equilibrium between economic success and ecological well-being. KEYWORDS: corporate entrepreneurship renewable energy, green banking, carbon footprints, sustainable development, environmental conservation environmental risks, Indian economy.

The Principle of Publicity in the Binding of Guarantees For Credit in the Distribution of Credit in Banking Institutions Linked to the Prudential Banking Principle

Objective: This research aims to determine the principle of publicity in binding collateral for mortgage rights in lending to banking institutions about the tenets of Prudential Banking. Method: The type of research used is normative legal research to test applicable norms or provisions. It can also be researched by examining library materials or secondary data. Doctrinal legal research. The approach method used is the conceptual approach method. Result: Economic actors complete their financial needs by borrowing funds or capital, which is called credit, through public or private banks, users of banking products or services because there are still practices that are considered not in line with existing regulations, thus resulting in or having an impact on the debtors and creditors themselves. It can harm both parties, both materially and immaterially. Conclusion: The application of the principle of prudence in credit distribution is critical to ensure that the bank is always in a healthy condition, always in a liquid, solvent and profitable condition, especially in the distribution of funds with collateral for land rights; the application of the publicity principle is also very influential in determining the position of the bank, especially in taking back credit repayments. Therefore, the focus of prudence and the direction of publicity support the achievement of legal certainty for parties entering into agreements in credit agreements, especially in providing mortgage credit.

ОСНОВЫ ИСЛАМСКИХ ФИНАНСОВ И БАНКИНГА: ПРИНЦИПЫ И ПРАКТИКА

The main thesis in Muslim finance is the fact that money itself has no value. From the point of view of Islam, Muslims cannot lend or receive money from anyone, while expecting benefits. The development of the Islamic financial market is an important global process. This research is based on the analysis of the development of the Islamic financial market and banking, the basic principles of Islamic banking, as well as alternative mechanisms and tools of Sharia financing are studied. The analysis of the changes and development of Islamic banking necessitated the following research methods: analysis, synthesis, formal logic, comparison, induction, deduction, etc. Islamic finance represents a unique form of financing based on the principles of Sharia law. They offer alternative mechanisms and tools that avoid the interest rate system and usury. The article discusses the principles of Islamic banking, which include the rejection of interest-bearing transactions, the provision of financing based on partnership and fair risk sharing. Islamic finance has significant potential for development and expansion in the global financial system. They offer opportunities for ethical investment and financing of projects that promote sustainable development and social progress. However, the introduction of Islamic banking requires the development of appropriate infrastructure, regulatory and legal frameworks, as well as qualified specialists. Further research and development of Islamic finance will help expand their application and strengthen the position of this form of financial activity in the global economy.

Innovations in Marketing Management of Islamic Banks Facing Global Market Challenges in Jayapura

As we know, Sharia Banking in Jayapura faces various challenges in an ever-changing global market such as awareness and understanding, regulations, competition, product and service development, and human resources. However, with the right product innovation, Sharia banking can remain competitive and even lead in the banking industry. By focusing on product diversification, Sharia-based technology, financial inclusivity and education, Sharia banking can continue to respond to global market challenges and serve society better. Product innovation is key to achieving goals and ensuring sustainable growth of Sharia banking in the future. The Sharia banking market is facing increasingly tight competition with conventional banks. Conventional banks are increasingly adopting Sharia banking principles in their products, thereby increasing competition in the market. Changes in sharia banking regulations continue to develop in Jayapura, and these changes can affect Sharia banking operations and products.

The Urgency of Applying Banking Prudential Principles in The Era of Disruption to Minimize Financing Risks

Market, liquidity, operational, and loan financing risks are common for banks. If the bank is unable to reclaim the primary credit it has extended or the money it is pursuing, financing risk will materialize. This kind of field study (field research) looks for and gathers data in areas where issues or phenomena arise of the application of the principle in muamalat financing, field research focuses on tracking down and examining already available materials in the field. The descriptive qualitative approach of data analysis is employed before being methodically assembled and analyzed. Using the 5C feasibility study in line with Law Number 21 of 2008 concerning Islamic Banking—Character, Capacity, Capital, Collateral, and Condition are fairly good—Bank Muamalat Indonesia is putting the Prudential Banking Principle into practice. Implementing repressive control of financing and taking action to resolve problematic financing by implementing 3R. Islamic banks must operate following Sharia principles, under the prudential concept stipulated in Article 2 of Law No. 7 of 1992, which governs Indonesian banking on the principles of economic democracy and prudence.