Determinants of Cost Efficiency of Islamic Banks of Pakistan

Sadiq, Ramla; Arshed, Noman; Ahmad, Hafiz Khalil

doi:10.12816/0045782

Cited by 6 publications

(4 citation statements)

References 37 publications

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“…The data from Bank Negara Malaysia shows that Islamic banking has just penetrated less than 25 percent of the total banking asset. Thus, the continued development of the Islamic financial system depends on the quality of the services and fulfilling the criterion set by customers in order to tackle their good perception towards Islamic financial system (Haron et al, 1994;Yousuff, 2006;Sadiq et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

The Roles of Lifestyle, Future Need and Customer Preferences in Customer’s Satisfaction on Islamic Banks Products and Services

Naim

Hamid

Wahab

2019

JMIFR

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This paper aims to address the relationship and the influence of lifestyle, future need, customer preferences toward customer’s satisfaction on Islamic banks products and services in northern region of Malaysia. This study used quantitative research method. Data were collected via questionnaires from 250 respondents from four different Islamic banks and data was analysed using SPSS v22 software. The study found that all the independent variables have positive significant relationship towards the satisfaction of Islamic banks’ services with the highest correlation is lifestyle and the lowest is future need factor. The study concluded that the lifestyle variable has the strongest influence to the dependent variable, followed by future need and customer preferences. This study provides a useful analysis to the policy makers in helping them to draft new policies and programmes relating to Islamic products and services which affects the masses. Besides, the result helps marketing team in Islamic banks to formulate strategies for future promotional activities. This paper empirically identified the relationship and the influence factors between lifestyle, future needs, customer preferences and the satisfaction among customers in using Islamic banks services.

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Section: Introductionmentioning

confidence: 99%

The Roles of Lifestyle, Future Need and Customer Preferences in Customer’s Satisfaction on Islamic Banks Products and Services

Naim

Hamid

Wahab

2019

JMIFR

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“…This leads us to the finding that Islamic banks also receive affect from variations in interest rates. Sadiq et al (2017) find that Islamic banks in Pakistan are less cost efficient due to excess liquidity, inadequate support and competition from conventional banks. Addressing the financial sector of Pakistan using DEA technique in another study it has been found that insurance sector in Pakistan is more technically efficient than banking sector (Shah and Masood, 2017).…”

Section: Literature Review Literature On Islamic Banksmentioning

confidence: 98%

Shariah Compliant Macaulay’s Duration Model Testing: Evidence from Islamic banks in Indonesia

Shah

Sukmana

Fianto

2021

JISEL

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The purpose of this research is to test Shariah compliant duration models on Islamic banks in Indonesia. This will be achieved using data of earning assets and risk bearing liabilities of Indonesian Islamic banks from 2009 to 2019. Using multiple regressions the results suggest that Shariah compliant duration models are robust to calculate duration of earning assets, return bearing liabilities and Islamic banks. This research adds to the previous research of testing Shariah compliant duration model. Ultimately, it will improve profitability, risk efficiency and Shariah efficiency by improved Shariah compliant measures of risk management. This will ultimately improve market capitalization and returns stability in the long run. A major limitation of the study is very short length of data of Islamic banks. Still another limitation is difference in commencement of business of various Islamic banks that makes length of data unequal.

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“…This leads to the finding that Islamic banks also receive effect from variations in interest rates. Sadiq et al (2017) and Shah and Masood (2017) find that Islamic banks in Pakistan are less cost efficient because of excess liquidity, inadequate support and cut throat competition from conventional banks. Hamza and Saadaoui (2018) in their work on Islamic banks report that changes in interest rates negatively affect financing of Islamic banks.…”

Section: Risk Management In Islamic Banksmentioning

confidence: 99%

Duration model for maturity gap risk management in Islamic banks

Shah

Sukmana

Fianto

2020

JM2

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Purpose The purpose of this paper is to propose models of duration for maturity gap risk management in Islamic banks. Design/methodology/approach A thorough review of literature on duration modeling, duration measurement in Islamic banks and Shariah compliance has been conducted to set parameters to develop Shariah-compliant maturity gap risk management mechanism. Findings Models based on durations of earning assets and return bearing liabilities using various rates of return earned and paid, benchmark rates and industry standards commonly used by Islamic and conventional banks. Practical implications Increased Shariah compliance has threefold impact. Firstly, it will increase trust of customers. Secondly, it will help improve profitability by reducing non-Shariah compliance penalties from the regulators. And finally, it will enhance market capitalization and returns stability to investors because of enhanced customer base, increased level of trust and increased profitability. Originality/value This research proposes Shariah-compliant maturity gap risk management models based on the concept of duration according to recommendations of Bank for International Settlements. As there is no such maturity gap risk management mechanism that meets the requirements of Shariah using benchmarks that are common between Islamic and conventional banks; therefore, this research presents risk management solutions that can be applied simultaneously in the entire banking sector.

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Determinants of Cost Efficiency of Islamic Banks of Pakistan

Cited by 6 publications

References 37 publications

The Roles of Lifestyle, Future Need and Customer Preferences in Customer’s Satisfaction on Islamic Banks Products and Services

The Roles of Lifestyle, Future Need and Customer Preferences in Customer’s Satisfaction on Islamic Banks Products and Services

Shariah Compliant Macaulay’s Duration Model Testing: Evidence from Islamic banks in Indonesia

Duration model for maturity gap risk management in Islamic banks

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