State Bank Of Pakistan Research Articles

Barriers to digital financial inclusion and digital financial services (DFS) in Pakistan: a phenomenological approach

Purpose Financial inclusion plays an essential role in today’s modern era. There has been a growing recognition that financial inclusion is an important enabler in poverty reduction. It is an essential tool in enabling inclusive growth and reducing poverty. This study aims to identify the barriers that limit customers to use digital financial services (DFS) in Pakistan. Second, this study aims to spread awareness of DFS and benefits of digital financial inclusion and services to retain customers in Pakistan. Third, the study purposes to retain old customers toward DFS in Pakistan. Design/methodology/approach This study is qualitative phenomenology study. The data were collected through interviews (i.e., online or face-to-face, depending on participants convenience). The sample comprised respondents with different age and different nature of work. Before conducting actual interviews, the interview questions were validated by three experts working in the State Bank of Pakistan in the relevant field. The interviews took from those individuals who were have digital financial account, but not using it due to some reasons. Data analysis carried out by using the NVivo software to deliver the themes after analyzing the data by querying, visualizing and coding. Findings The study categorized s6 themes as second order themes including dependency, illiteracy, lack of trust, cost, lack of access to financial services and financial instability by emerging 16 subject themes as 1st order themes. It including financial illiteracy, digital illiteracy, lack of knowledge, depend on spouse, depend on parents/children, depend on siblings, fear, security issues, privacy issues, lack of internet access, lack of account access, unemployment, low income, high expenses, other cost and transaction cost. These barriers limit DFS adoption and its use. This study found that 90% respondents were financial illiterate and 80% respondents do not have the knowledge of new recent e-payment system. Originality/value However, this study contributes to reducing these barriers and spreading knowledge about financial inclusion and DFS. From a managerial perspective, additional attention needs to be devoted to the adoption of financial inclusion and innovation in DFS.

Problems in Ongoing Training to Employees in State Bank of Pakistan

Continuous training and development of employees are crucial for organizations to adapt to changing environments and enhance their competitiveness. The State Bank of Pakistan (SBP), as the central bank of the country, plays a pivotal role in regulating and overseeing the financial sector. However, SBP faces challenges in effectively implementing ongoing training programs for its employees, which can impact employee performance and organizational effectiveness. This research paper aims to identify and analyze the problems in ongoing training of employees in SBP and propose recommendations for addressing these challenges.

The Impact of Macroeconomic Factors on the Banking Sector’s Profitability in Pakistan

This research aims to study and analyze the impact of macroeconomic factor on the banking sector’s profitability in Pakistan. Banking sector of Pakistan is the backbone of its economy. The study explains the importance of banking industry of Pakistan and its achievements and evolvement throughout the years. The objective of the study is to examine the macroeconomic factors’ influence on the banking sector in Pakistan and to investigate that whether the profitability is only determined by the bank-specific internal factors or if it is also influenced by macroeconomic shocks and factors of the economy. The study is quantitative and secondary data is employed in order to conduct this paper. The sample size is financial data of scheduled banks in Pakistan from the year 2000 to2022, which is converted in quarter data and 84 observations have been incorporated in the study. “Returns on Assets” (ROA) is selected as dependent variable of this study since it measures profitability of banks. Whereas “Foreign Direct Investment” (FDI), “Exchange rate” (LER), “Inflation” (INF), “GDP growth” (GROWTH), “Liquidity” (LLIQ), “Total Deposits” (LT_DEP) and “Credit’s ratio” (CREDIT) of the banks are selected as independent variables. The data for bank specific variables is collected from the websites of “State Bank of Pakistan” (SBP) and “Federal Reserves of Economic Data” (FRED) while the data for macroeconomic variables is derived from the database of “World Bank” and “Macrotrends”. For empirical analysis, we have applied “Vector Autoregression” (VAR) model, followed by “Multivariate Granger Causality test”, “Impulse Response Function” (IRF) and “Forecast Error Variance Decomposition” (FEVD). The main findings of study reveals that the profitability of Banking sector in Pakistan is more influenced by its own internal factors rather than the external / macroeconomic factors. Amongst macroeconomic variables, “Foreign Direct Investment” (FDI) and “Inflation” (INF) are found to have the significant impact, while “Exchange rate” (LER) and “GDP growth rate” (GROWTH) are found to have insignificant impact on banks’ “Return on Assets” (ROA). All the internal factors of our study i.e. “Liquidity” (LLIQ), “Deposits” (LT_DEP) and “Credit ratio” (CREDIT) are found to have significant impact on profitability, which is measured through “Return on Assets” (ROA). In short, the profitability of banking sector in Pakistan is mainly influenced by bank-specific internal factors of the industry. The macroeconomic factors are only 50 percent % affective on the banks’ performance.

Unveiling the Relationship between Voluntary Environmental Standards and Stock Market Performance: Empirical Insights from Textile Manufacturing Firms in Pakistan

The primary objective of this study is to examine the impact of voluntary environmental standards, specifically EMS and eco-labels, on firms' stock market performance. To achieve this aim, fixed-effect regressions were applied using panel data from 96 textile firms listed on the Pakistan Stock Exchange between 2009 and 2022. Data were meticulously sourced from the State Bank of Pakistan (2022), annual reports of manufacturing firms, and their official websites. The findings of this study indicate a positive correlation between the adoption of EMS & eco-labels, and stock market performance among manufacturing firms in Pakistan. Similarly, eco-label also helps to promote sustainable business. Similarly, EMS is also important for EPS. It is also observed that firms having eco-label has significant impact on EPS. Eco-label helps to increase sale, profitability and stock market by ensuring the sustainable production, because, customer satisfaction and loyalty increases. By adopting VES, an industry can achieved increase in profit, reduce cost, improve environmental standards and, also, increase consumer confidence. The outcomes of the study signify the importance of managerial commitment to the adoption and implementation of voluntary environmental standards within these firms.

Political Stability and Performance of Financial Institutions in Pakistan

The purpose of the present study is to analyze the impact of political stability on the performance of financial Institutions in Pakistan. This is the first study in the context of Pakistan that analyzes the performance of financial institutions during the period of political stability. The study's sample period was from 2008 to 2017 because, for the first time in Pakistan, two pure political governments completed their electoral term since the country's independence in 1947. The data is collected from the balance sheet analysis provided by the State Bank of Pakistan on its official website. For the data analysis, the study used the CAMEL analysis technique. The CAMEL analysis technique was also used by the IMF in 2020 to analyze the performance of underdeveloped and developing countries of the world. The results show that the performance of locally owned financial institutions (MCB Bank, United Bank Limited, and Allied Bank) in Pakistan increased during this period. Still, foreign-owned bank's performance is not good even if they cannot fulfill the minimum requirement established by the State Bank of Pakistan. The results contribute to the efficiency theory of financial institutions. Further, the study suggests that the researchers can test the significance of the results by changing sectors to confirm, modify, accept, or reject the results.

Behavioral and Rational Explanation of Stock Price Performance Around Mergers and Acquisitions in Pakistan: Evidence from Decomposition of Market to Book Ratio

This study aims to analyze the firm-specific errors (FSSE) as a proxy for mis-valuation and the long-run value-to-book ratio as a proxy for growth opportunities during mergers and acquisitions. In this study, the researcher used the RKRV methodology, which was developed in 2004, to analyze firm-specific errors and future growth opportunities by decomposing the market-to-book ratio in the merged organization of the Pakistani financial sector. The researcher used the mergers and acquisitions data from the financial sector from 2000 to 2021. For the purpose of analysis, the researcher prepared one year of pre-merger and three years of the merger performance of merged financial institutions and compared it with nonmerger financial institutions. The results of non-zero log differences between market values and fundamental values show that in Pakistan firms, firm-specific errors (FSSE) exist in the merged and nonmerger financial institutions. The second component of this methodology was to calculate the long-run value of the book (LRVTB) by taking the difference between the estimated market value and the firm's book value as a proxy for long-run growth opportunities. The results show that no long-run growth opportunities exist in Pakistan's merged and non-merged financial institutions because the difference between estimated market value and book value is negative. The third component of this study is to estimate time series sector error (TSSE) by taking log differences between fundamental value and estimated market value if the firm-specific error exists in the valuation of firms and there are no long-run growth opportunities. The results show that time series sector error also exists in the valuation of financial institutions. The researcher concludes that the mergers and acquisitions intentions are to meet the minimum capital requirement enforced by The State Bank of Pakistan. The merger and acquisition activities that took place during the years 2000 to 2011 are the legislative mergers. The results satisfy the economic shocks theory. There is no issue of agency problems, whether mergers are successful.

Is the financial industry ready for circular economy and sustainable development goals? A case of a developing country

PurposeThis study aims to examine the role of Pakistan’s banking industry in the transition toward a circular economy (CE) and the implementation of sustainable development goals (SDGs).Design/methodology/approachThis study uses a qualitative content analysis technique on 75 annual reports of 25 Pakistani banks. Data has been collected from websites and annual reports of concerned banks incorporating CE practices and SDGs in their annual reports. In addition, the data collected from the annual reports of concern sample is based on three dimensions of sustainable development (environmental, social and governance) along with the leading practices of CE to reduce, reuse, recycle, redesign, restructure, and recover.FindingsThe findings show that most firms have reported CE and SDGs. Also, the study explores the level and linkage of CE and SDGs practices among the sample firms.Research limitations/implicationsThis study provides important insights for the regulators, policymakers, State Bank of Pakistan, commercial banks and stakeholders in Pakistan’s banking industry. It adds significant value to the CE and SDGs, especially in developing economies like Pakistan.Originality/valueThe study has explored and examined the ever-investigated dimensions of SDGs and CE in the banking industry of Pakistan.

Impact of Monetary Policy Rate on Conventional and Islamic Banking

Purpose: This study examine the role of banking portfolios based on religious philosophy i.e. Islamic banks in comparison of conventional banks of Pakistan to determine whether both of the portfolios of Islamic and conventional banks absorbs monetary policy shocks on the basis of bank specific religious philosophy.
 Methodology: The study collected quarterly data from 2005 to 2018 from the official sources of the central bank of Pakistan i.e. State Bank of Pakistan and tested by using econometric techniques. The variables include proxy of central bank Policy Rate, Gross Domestic Product and banking portfolios.
 Findings: The outcome of the study reveals that Islamic philosophy of banks do not contribute significantly in varying effects of monetary policy.
 Unique Contribution to Theory, Practice and Policy: The government may develop a dual monetary system and introduce pricing mechanisms for Islamic banks separately by introducing sharia-compliant monetary policy instruments to enhance Islamic share in the overall financial plan. Further, a limited number of Sharia advisors who are simultaneously equipped with financial knowledge in another handicap in sharia-compliant product development.

The Relationship between Types of Political Regimes and Income Inequality in Pakistan

Aim: Income inequality has emerged as a significant concern within the Pakistani economy, prompting extensive investigations across various dimensions. This study aims to explore the relationship between types of political regime and income inequality, specifically in Pakistan.
 Methods: Time series data spanning from 1972 to 2019 were utilized, obtained from the World Bank, Polity IV Project, and the Handbook of Statistics on Pakistan Economy by the State Bank of Pakistan. To measure types of political regimes, the Polity index was employed, while the Gini coefficient served as the metric for income inequality. Additionally, this research considered several factors, including GDP per capita, the ratio of direct taxes to GDP, the percentage of government expenditure on education relative to GDP, and the percentage of government expenditure on community and social services relative to GDP, to control for their direct effects. The stationarity of the data was assessed using the augmented Dickey-Fuller test, while the autoregressive distributive lag (ARDL) model was employed to examine the cointegrating relationship among the variables in the model.
 Results: The empirical findings from the estimation demonstrate a lasting negative correlation between the types of political regimes in Pakistan and wealth disparities in the short and medium term. The results highlight the notable detrimental effect of different political regimes on the nation's economic disparity.
 Conclusion: A one percent increase in the Polity score is associated with a 0.45 percent long-term and a 0.25 percent short-term decrease in the Gini coefficient.
 Recommendation: Pakistan should strive towards a stable democratic political framework and implement sustainable economic policies to effectively address income disparity and achieve a desirable level of income distribution.

Fuzzy Cash Flow Analysis of Fluctuations in Interest Rates at the State Bank of Pakistan using Present Worth Criterion

A systematic approach is required to analyze present worth by incorporating annual interest rate fluctuations. This is a key factor in attracting local and foreign investors and maintaining a level of economic advancement. This study primarily focuses on the domain of the State Bank of Pakistan (SBP) and contributes towards achieving three major objectives. The first objective includes modeling interest rate values as triangular fuzzy numbers, and using the Analytic Hierarchy Process (AHP), a Multi-criteria Decision-Making technique (MCDM). Second, the triangular fuzzy interest rates are forecasted over a future timespan. Subsequently, the last objective includes the use of the Present Worth Analysis (PWA) to calculate the final net present value. The results demonstrate a trend in interest rates with net present values of specific future years. This research is a good initiative for the SBP and helpful for both foreign and local investors. The study is novel in that it involves the merging of qualitative and quantitative data. Furthermore, the combination of the forecasting technique, the AHP, fuzzy set theory, and present worth criteria renders a unique approach to formulating present worth. There is no previous research of this magnitude that has been conducted on this topic in a developing country such as Pakistan. This study delves into the annual interest rate fluctuations, providing valuable insights for present worth calculations.

Analysing the Role of Money Supply on Inflation: A case Study of Pakistan

Monetary tools, money supply, and exchange rates play a significant role in a country's growth and substantially impact its development trajectory. In order to address this issue, the study empirically examines the relationship between money supply, exchange rate, and Inflation in Pakistan. The study utilized annual time series data from 1990-2020 from the State Bank of Pakistan (SBP) and World Development Indicators (WDI). To avoid spurious results, the Phillips-Perron unit root test and the Augmented Dickey-Fuller test were applied to check the data stationarity, which was integrated at different orders of integration. The exchange rate and inflation are stationary at the 1st difference I(1), while the money supply is stationary at the same level I(0). The Autoregressive Distributed Lag (ARDL) model analyzes the variables' short- and long-term relationships. The study confirms the presence of both short-run and long-run relationships among the variables. The results show that money supply and exchange rates significantly impact inflation positively. A negative and significant error correction term (ECT) indicates strong equilibrium convergence among variables. The upper and lower bounds values are below the F-statistics, indicating a significant long-term association between the statistically significant variables. The research contributes to current knowledge by presenting new awareness into the dynamic relations among money supply, exchange rate, and inflation. Furthermore, this study will help to design monetary policy to achieve specific targets to control inflation and volatility in exchange rates. It will help regulators and policymakers stabilize financial markets and the supply and demand of products, prevent pricing mechanisms and import exports, and increase the balance of payment accounts.

Perceptions and Realities: Investigating Barriers to Adopt Islamic Banking in Pakistan

This study aims to identify the barriers to adopting Islamic Banking (IB) in Pakistan. This study is focused on three categories of banking customers: IB users, non-users, and those who use both IB and Convemtional Banking (CB). We utilize qualitative methods include in-depth interviews with IB Managers, scholars, and focus groups of the three consumers types. Findings revealed several barriers to broad-based adoption of Islamic banking in Pakistan such as: Lack of Trust, high adoption costs, perception that IB and CB are similar, lower returns, the state bank of Pakistan’s reliance on CB methods, and financial literacy gaps. This study stands out for its inclusion of focus groups with both users and non-users, as well as expert interviews, providing insights beyond literature review. Additionally, it offers user and non-user profiles valuable for customer segmentation and targeting.

Issues of Legislation of Cryptocurrency in Pakistan: An Analysis

Cryptocurrencies have been gaining popularity in Pakistan since 2015. However, in 2018, digital currencies were banned in Pakistan by the State Bank of Pakistan and the Federal Board of Revenue. The current paper will explore the issues of the legalization of cryptocurrencies in Pakistan. The study shares a brief description of international and national reviews about the trend of cryptocurrencies and their legality. There are various cryptocurrencies, including Bitcoin, Pakcoin, OKeX, Blockfolio, Crypto and KuCoin. By adopting the qualitative methodology, the researchers have analyzed the social media context, famous news websites and views of famous personalities involved in attempts to legalize and trend cryptocurrencies in Pakistan. It has been found in the study that there are various policy and legislative issues along with the consent of different governments of all provinces of Pakistan that declared cryptocurrency illegal and banned at different times. There is a need for some serious concerns regarding people's awareness of cryptocurrency to enhance the country's economy on practical grounds.

Evaluation of Green Banking in Pakistan Using Framework of the Central Bank: Employing TOPSIS Approach

The purpose of current research is to evaluate commercial banks’ performance regarding Green Banking (GB) practices using State Bank of Pakistan’s (SBP) framework as criteria. The study aims to rank and compare commercial banks with respect to their acceptance, adoption and implementation of green guidelines issued by SBP. The research design comprises of systematic review of literature, data extraction and analysis. Literature review consists of overview of GB practices in global banking industry as well as local industry of Pakistan. SBP has issued guidelines and required its commercial banks to transform banking practices towards green practices as a step towards sustainable green economy. The study is cross-sectional; the data collection involves content analysis of annual reports of commercial banks of Pakistan for the year 2021. Out of total forty-one banks, fourteen banks are shortlisted, using purposive sampling method, that have disclosed information about their GB practices in their annual reports. Analysis is performed using Multi-Criteria Decision Making technique (MCDM) of ‘Technique for Order Preference by Similarity to Ideal Solution’ (TOPSIS). As per findings, Habib Bank Ltd. is at the top of bank rankings, Allied Bank is at the second and Soneri Bank is at the third rank in initiating, implementing, disclosing and obtaining positive outcomes out of their green banking initiatives. The study has implications for regulators, policy makers and practitioners. It can fill the gap in literature by adding a discussion on an important topic that is being ignored by previous researchers. The regulatory institution (i.e. SBP) can learn performance of its banks on GB guidelines. The practitioners can evaluate themselves on green practices scale and learn on how to improve their practices to perform better ahead of competitors.

Shariah governance framework for Islamic banking in Pakistan: a critical review and comparison with AAOIFI

Purpose The study aims to critically review the Shariah governance framework for Islamic banking prevailing in Pakistan and provide a comparison with Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). Design/methodology/approach It analyzes 16 circulars issued by the State Bank of Pakistan (SBP) since 2002, including three Shariah governance frameworks in 2014, 2015 and 2018. Additionally, the study compares the SBP and AAOIFI Shariah governance standards to evaluate the soundness of the SBP framework against international benchmarks. Findings Pakistan’s Shariah governance model is centralized, with the SBP’s Shariah board having ultimate authority. The SBP has provided a comprehensive Shariah framework, which includes among others, the criteria for the qualifications and conflict of interests of Shariah members. Both AAOIFI and SBP Shariah governance frameworks have similarities and differences in terms of the tenure of Shariah Supervisory Board (SSB) members, reporting line of SSB, number of SSB meetings, minimum experience of SSB members, primary duties of Shariah board, code of ethics and conduct for SSB and management and requirement of publication of SSB report in the annual report of Islamic banks. The frameworks differ in terms of the delegation of SSB powers, assessment and appraisal of SSB effectiveness and outsourcing of Shariah Compliance Department and Internal Shariah Audit Unit. Practical implications The study recommends expanding the qualification criteria for Shariah advisors to include additional degrees and qualifications, upholding stringent criteria for conflict of interests and promoting stakeholder consultation through exposure drafts. Originality/value To the best of the authors’ knowledge, this is the first of its kind which critically review and compare the Shariah governance framework prevailing in Pakistan.

Regulatory constraints, responsibilities and consultation (CRC) for legal institutionalization of cryptocurrencies in Pakistan

PurposeThis study aims to synthesize the existing literature with insights gained from interviews conducted with regulatory experts. The objective is to analyse the challenges associated with incorporating cryptocurrencies into regulatory frameworks and to explore constraints in the regulatory institutionalization of cryptocurrencies.Design/methodology/approachThe study methodology consists of two steps. The first step is to identify regulatory constraints in the literature review and in the next step, interviews are conducted with officials of the State Bank of Pakistan (SBP). The study used a qualitative case study methodology, in which a single case (regulatory constraint) was selected as a unit of analysis.FindingsThe findings show that lack of traceability, legal status, lack of governmental control due to decentralization, difficulty enforcing laws, volatility, lack of skills with regulators and difficulty integrating cryptocurrencies into the current financial system are the main obstacles to the introduction of a regulatory framework. Thus, on a broader conceptual level, the findings can be grouped into opportunism, lack of strategic capability and fragmented global laws.Research limitations/implicationsThis study could inform global cryptocurrency regulation discussions, sharing a developing country’s views on balancing the government, central banks, the financial sector and public interests. This could guide countries to consider cryptocurrency adoption in similar situations. This could affect the cryptocurrency market, impacting demand, supply and investor trust in Pakistan.Practical implicationsThe study has implications for policy making officials. The research aims to offer valuable insights to the SBP and other regulatory authorities, helping them identify potential risks and create an effective regulatory framework for cryptocurrencies.Social implicationsThe study has implications for society in knowing about the volatile nature of cryptos and anonymity of their issuers, which poses regulatory constraints. This then implies its harmfullness to its traders and the huge losses that may arise from their trading due to its volatile nature.Originality/valueThis study contributes to the literature on the constraints, responsibilities and consultation framework of cryptocurrency regulations.

PREDICTING PAKISTANS’ MUTUAL FUND PERFORMANCE: AN EVALUATION OF TRADITIONAL AND MODERN MEASURES

Mutual Funds enable small investors to benefit from the capital market with minimal investments, thanks to the expertise of professional managers. This study focuses on the Pakistani Mutual Fund industry and evaluates the suitability of traditional and multifactor asset pricing models in assessing Mutual Fund performance. Since multifactor models are rarely used in Pakistani research, this study employs the CAPM, Fama French, and Carhart models to assess the performance of Pakistan Mutual Funds. Data from 100 open-end Mutual Funds between 2005 and 2017 was collected from the Mutual Fund Association of Pakistan, while risk-free rates data was gathered from the State Bank of Pakistan and stock data from the Pakistan Stock Exchange. Ratio analysis, CAPM, Fama French-3 Factor, and Carhart-4 Factor models were used to analyze the data and determine which model was most suitable. The results indicate that the CAPM affects the market factors of the majority of portfolios. Conversely, the size factor, value factor, and momentum factor in the Fama French and Carhart models have an insignificant effect on the majority of portfolios. The Gibbon Rose Shanken test reveals that the CAPM model is the most suitable for evaluating Mutual Fund performance in Pakistan. The findings of this study have implications for asset management company managers and investors alike. It provides valuable insights into which funds perform better and which types of funds are ideal for investment.

Economic Factors Influencing Housing Prices in Pakistan

The aim of this research is to explore the factors influencing housing prices in Pakistan. The author used monthly time series data for the period from 2011 to 2020, which were obtained from different sources: housing prices data from zameen.com, Karachi interbank offered rate (KIBOR) as a proxy for monetary policy, consumer price index as a proxy for inflation, and exchange rate data from the State Bank of Pakistan. Various methods, such as autoregressive distributed lag (ARDL), comparative analysis and deductive analysis were employed. Before using the ARDL technique, a proper lag length was selected, which turned out to be 11 months. Various diagnostic tests indicated model stability with no autocorrelation or structural breaks. The author concluded that the KIBOR rate negatively affected housing prices, while inflation and exchange rates affected house prices positively.

The Validity and Reliability Performance Evaluation of the Fama-French Six Risk Premium Factors Model: Evidence from the Capital Stock Market of Pakistan

The study goal, aims, purpose and objective are to examine the Validity, Reliability and Performance Evaluation of the Fama-French Six Risk Premium Factor’s Model: Evidence from Capital Stock Market of Pakistan. The sample used were the balance sheet and Income statements annual reports of an eligible Non-Financial Companies issued from a State Bank of Pakistan (SBP). However, the idea for portfolio creation and a breakpoint have taken from keneath french data side. The sample data is 130 Non-Financial Companies covering the actual analysis from July 2014 to June, 2019. The (2x2) = 4 sort approaches for emerging markets and returns are used to construct portfolio and breakpoints for the SMB, HML, RMW, CMA, and WML other than Mkt-Rft. A total set of 16 set of portfolios are designed from dual categorization (Bivariate) designed for separately couple of size and one additional factor. A whole set of (4x4= 16), portfolios shaped as a dependent factor typically recognized as left-hand-side portfolios (LHS) and the same for independent risk premium factors for right hand side (RHS). The study found and concluded regarding the intercepts that all 16 set of four portfolios are insignificant and there are no pricing errors in the time of cost determination and predictions. The other objectives regarding slopes are found and concluded that the slopes of all risk premium i.e., MKT, SMB, HML, RMW, CMA, and WML and along with error correction term ECT (-1) are all positives and negatives and also statistically significant and explaining and predicting the average portfolio returns for 16 set of portfolios excess returns. The third main objectives regarding the other performance evaluation indicators, proposed to FF6F model’s relatively greater descriptive and explanatory power in each group of portfolios. Further, the value of R-squared is less than Durbin Watson value, means there is no sign of spurious linear regression too. Finally, it is found and concluded that the quality criteria suggests that the small values of Avg|α| or Avg|α-α ̅|in all equations are as the better model. It is further found and concluded that the Avg|α| of all six risk premium factors asset pricing models are the lowest values and acceptable range. It also further found and concluded that the fGRS and pGRS display the alpha is insignificant for 16 set of portfolios The research identifies that the asset pricing models are relatively more effective for diversified portfolios than concentrated portfolios and it is challenging to find a model that is effective in explaining the variation in the returns of any portfolio, but there is the possibility of finding a portfolio which works for a model and the investors can maximize their returns with a carefully chosen portfolio based on particular characteristics with a fewer number of stocks. Study proposes that corporate managers, policymakers, financial experts, and individual investors should have a stronger understanding of how to forecast stock prices on the Pakistan Stock Market, since it will help them when they are making investment decisions.

FINTECH'S ROLE IN SUSTAINABLE BANKING PERFORMANCE: ARE GREEN BANKING POLICIES DRIVING SUSTAINABILITY IN PAKISTAN'S BANKING SYSTEM?

The technology pervades every aspect of business operations, making it impossible for any organization to evade its presence. The delight of the customer is now the priority of the organization. Adopting the sustainable practice of using fintech to facilitate the customer with ease is the game now for every bank in Pakistan and it needs serious attention. This study explored this gap and added facilitation aspect of green banking practices to the loop. Without the sustainable developmental goals-SDG, no business sees its future growing. Adoption of fintech is one of them. State Bank of Pakistan also promulgated green banking regulation in 2017, which forces the banks to adopt green banking practices in finance, operational, and daily routines of the personnel. Our explanatory, quantitative study assessed the effect of fintech on sustainable green practices and the bank's green practice activities as a mediator through a questionnaire consisting of 31 questions filled by 302 banking professionals in Karachi, Pakistan, & found that the green banking activities mediated the relationship between the fintech adoption and sustainable banking practices but the direct effect of fintech is found to be insignificant as local environment and the mindset of the employee is not ready for it. The study provide vauable information and recommendations.