Search results for: banking sector instability

Authors: A. Al Drees, A. Alahmari, R. Almuwayshir

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The advanced information technology is becoming an important factor in the development of financial services industry, especially the banking industry. It has introduced new ways of delivering banking to the customer, such as Internet Banking. Banks began to look at electronic banking (e-banking) as a means to replace some of their traditional branch functions using the Internet as a new distribution channel. Some consumers have at least more than one account, and across banks, and access these accounts using e-banking services. To look at the current net worth position, customers have to login to each of their accounts and get the details and work on consolidation. This not only takes ample time but it is a repetitive activity at a specified frequency. To address this point, an account aggregation concept is added as a solution. E-banking account aggregation, as one of the e-banking types, appeared to build a stronger relationship with customers. Account Aggregation Service generally refers to a service that allows customers to manage their bank accounts maintained in different institutions through a common Internet banking operating a platform, with a high concern to security and privacy. This paper presents an overview of an e-banking account aggregation approach as a new service in the e-banking field.

Keywords: e-banking, account aggregation, security, enterprise development

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Authors: Marina Magdy Naguib Karas

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New methods of providing banking services to the customer have been introduced, such as online banking. Banks have begun to consider electronic banking (e-banking) as a way to replace some traditional branch functions by using the Internet as a new distribution channel. Some consumers have at least one account at multiple banks and access these accounts through online banking. To check their current net worth, clients need to log into each of their accounts, get detailed information, and work toward consolidation. Not only is it time-consuming, but it is also a repeatable activity with a certain frequency. To solve this problem, the concept of account aggregation was added as a solution. Account consolidation in e-banking as a form of electronic banking appears to build a stronger relationship with customers. An account linking service is generally referred to as a service that allows customers to manage their bank accounts held at different institutions via a common online banking platform that places a high priority on security and data protection. The article provides an overview of the account aggregation approach in e-banking as a new service in the area of e-banking.

Keywords: compatibility, complexity, mobile banking, observation, risk banking technology, Internet banks, modernization of banks, banks, account aggregation, security, enterprise development

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Authors: Mustapha Achibane, Imane Allam

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Since the nineties, all Moroccan banking institutions have to respect an arsenal of prudential ratios. The respect of these prudential measures aims to ensure the financial system stability. In order to do so, regulatory authorities tried to reduce the financial and operational risks incurred by the banking entities. Meanwhile, regulatory authorities demanded a balance sheet management work from banks. They also asked them to establish a management control system to manage operational risk, as well as an effort in terms of incurred risk-based commitments. Therefore, the prudential approach has a macroeconomic nature and it is presented as a determinant of the operational, microeconomic approach. This operational approach takes the form of a strategy that each banking entity must develop to manage the different banking risks. This study seeks to analyze the problem of risk management between the prudential and the operational approaches. It was processed through a literature review followed by an analysis of the Moroccan banking sector’s performance. At first, we will reconcile the inductive logic and then, the analytical one. The first approach consists of analyzing the phenomenon from a normative and conceptual perspective, while the second one will consist of considering the Moroccan banking system and analyzing the behavior of Moroccan banking entities in terms of risk management and performance. The results identified a favorable growth in terms of performance, despite the huge provisioning effort made to meet the international standards and the harmonization of the regulations.

Keywords: banking performance, financial intermediation, operational approach, prudential standards, risk management

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Authors: Gerges Samaan Henin Abdalla

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New methods of providing banking services to the customer have been introduced, such as online banking. Banks have begun to consider electronic banking (e-banking) as a way to replace some traditional branch functions by using the Internet as a new distribution channel. Some consumers have at least one account at multiple banks and access these accounts through online banking. To check their current net worth, clients need to log into each of their accounts, get detailed information, and work toward consolidation. Not only is it time consuming, but it is also a repeatable activity with a certain frequency. To solve this problem, the concept of account aggregation was added as a solution. Account consolidation in e-banking as a form of electronic banking appears to build a stronger relationship with customers. An account linking service is generally referred to as a service that allows customers to manage their bank accounts held at different institutions via a common online banking platform that places a high priority on security and data protection. The article provides an overview of the account aggregation approach in e-banking as a new service in the area of e-banking.

Keywords: compatibility, complexity, mobile banking, observation, risk banking technology, Internet banks, modernization of banks, banks, account aggregation, security, enterprise development

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Authors: Md. Abdul Kader

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Several reports released by Global Financial Integrity (GFI) in recent times have identified Bangladesh as being among the worst affected countries to the scourge of money laundering (ML) and terrorist financing (TF). The money laundering (ML) and terrorist financing (TF) risks associated with conventional finance are generally well identified and understood by the relevant national authorities. There is, however, no common understanding of ML/TF risks associated with Islamic Banking. This paper attempts to examine the issues of money laundering (ML) and terrorist financing (TF) in Islamic Banks of Bangladesh. This study also investigates the risk factors associated with Islamic Banking system of Bangladesh that are favorable for ML and TF and which prevent the government to control such issues in the Islamic Banks of Bangladesh. Qualitative research methods were employed by studying various reports from journals, newspapers, bank reports and periodicals. In addition, five ex-bankers who were in the policy making bodies of three Islamic Banks were also interviewed. Findings suggest that government policies regarding Islamic Banking system in Bangladesh are not well defined and clear. Shariah law, that is the guiding principle of Islamic Banking, is not well recognized by the government policy makers, and thus they left the responsibility to the governing bodies of the banks. Other challenges that were found in the study are: the complexity of some Islamic banking products, the different forms of relationship between the banks and their clients, the inadequate ability and skill in the supervision of Islamic finance, particularly in jurisdictions, to evaluate their activities. All these risk factors paved the ground for ML and TF in the Islamic Banks of Bangladesh. However, due to unconventional nature of Banking and lack of investigative reporting on Islamic Banking, this study could not cover the whole picture of the ML/TF of Islamic Banks of Bangladesh. However, both qualitative documents and interviewees confirmed that Islamic Banking in Bangladesh could be branded as risky when it comes to money laundering and terror financing. This study recommends that the central bank authorities who supervise Islamic finance and the government policy makers should obtain a greater understanding of the specific ML/TF risks that may arise in Islamic Banks and develop a proper response. The study findings are expected to considerably impact Islamic banking management and policymakers to develop strong and appropriate policy to enhance transparency, accountability, and efficiency in banking sector. The regulatory bodies can consider the findings to disseminate anti money laundering and terror financing related rules and regulations.

Keywords: money laundering, terror financing, islamic banking, bangladesh

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Authors: F. Q. Shao, W. Q. Wang, Y. Yin, T. P. Yu, D. B. Zou, J. M. Ouyang

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The Radiation Pressure Acceleration (RPA) mechanism is very promising in laser-driven ion acceleration because of high laser-ion energy conversion efficiency. Although some experiments have shown the characteristics of RPA, the energy of ions is quite limited. The ion energy obtained in experiments is only several MeV/u, which is much lower than theoretical prediction. One possible limiting factor is the transverse instability incited in the RPA process. The transverse instability is basically considered as the Rayleigh-Taylor (RT) instability, which is a kind of interfacial instability and occurs when a light fluid pushes against a heavy fluid. Multi-dimensional particle-in-cell (PIC) simulations show that the onset of transverse instability will destroy the acceleration process and broaden the energy spectrum of fast ions during the RPA dominant ion acceleration processes. The evidence of the RT instability driven by radiation pressure has been observed in a laser-foil interaction experiment in a typical RPA regime, and the dominant scale of RT instability is close to the laser wavelength. The development of transverse instability in the radiation-pressure-acceleration dominant laser-foil interaction is numerically examined by two-dimensional particle-in-cell simulations. When a laser interacts with a foil with modulated surface, the internal instability is quickly incited and it develops. The linear growth and saturation of the transverse instability are observed, and the growth rate is numerically diagnosed. In order to optimize interaction parameters, a method of information entropy is put forward to describe the chaotic degree of the transverse instability. With moderate modulation, the transverse instability shows a low chaotic degree and a quasi-monoenergetic proton beam is produced.

Keywords: information entropy, radiation pressure acceleration, Rayleigh-Taylor instability, transverse instability

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Authors: Azzi Mohammed Amin

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In the last decade Algeria has investigated in a scale of economic reforms including different areas, among these; reforms in the banking system. This was mainly through the implementation of some regulations that facilitate the shift to market economy and guarantee integration into global economy. The most important new ideas that have emerged in this area are perhaps to find a possibility of integrating the so called e-banking. Based on what has already been stated, we will try in this study to highlight the significant role of electronic banking services as novel trends in the modernization and development of Algerian banks.

Keywords: banking technology, Internet banks, modernization of banks, virtual banks

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Authors: Narvada Ramdhany, Reena Bhattu Babajee

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The 2007-2008 Global Financial Crisis which initiated in the US had a global outreach, impacting the financial and banking sectors of several economies; such as European countries, developing and emerging countries in Asia, Latin America and Africa. European countries represent one of the main sources of export earnings for Mauritius and given that Europe has been quite profoundly affected by the crisis, the Mauritian economy also could have been negatively affected. This study is being undertaken to see if the crisis had a spill-over effect on the Mauritian banking system. It will also enable to determine if the measures put in place to counteract the crisis by regulatory authorities have been effective. The study will be carried out on 17 banks and data will be collected over a time frame of seven years; with a pre-crisis period from 2005 to 2007 and a post-crisis period from 2009 to 2011. The impact of the crisis as such will be measured through the financial performance of the banks, using financial ratios and regression analysis. The results show that during the period concerned Mauritian banks have remained solvent and relatively stable. One of the main explanations put forward to explain the resilience of the banking sector to the crisis is that foreign exposure was relatively low. Another explanation put forward is that Mauritian banks normally transact mainly with prime borrowers unlike most the banks which were affected by the financial crisis.  

Keywords: global financial crisis, banking sector, financial performance, Mauritian banks

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Authors: Javier Sanchez Vidal, Ciarán Mac An Bhaird, Brian Lucey

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This study examines the decision by firm owners not to apply for intermediated debt due to a perception that their application will be rejected. Based on a sample of SMEs in 9 European countries over the period 2009-2011, we examine potential explanatory factors for borrower discouragement, including firm, macroeconomic, regulatory and banking industry variables. Compared with firms that applied for bank loans, discouraged borrowers are smaller, younger, have declining turnover and an increasing debt/assets ratio. Perceived willingness of banks to lend rather than the company’s own credit history is more important to encourage applications. Perceptions of refusal are procyclical and may be self-perpetuating. Increased concentration in the banking sector reduces discouragement, indicating the importance of relationship banking. Transmission of macro effects through the banking system and economic environment may also lead to higher levels of discouragement. A good regulatory scheme is also advisable, either for the lenders or the borrowers (overall the good ones).

Keywords: entrepreneurial finance, discouraged borrowers, banking, financial crisis, eurozone

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Authors: Raif Parlakkaya, Huseyin Cetin, Duygu Irdiren

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By the development of World Wide Web, the usage rate of Internet has rapidly grown globally; and provided a basis for the emergence of electronic business. As well as other sectors, the banking sector has adopted the use of internet with the developments in information and communication technologies. Due to the public disclosure and transparency principle of Corporate Governance, the importance of information disclosure of banks on their web sites has increased significantly. For the purpose of this study, a Bank Disclosure Attribute Index (BDAI) in Turkey has been constructed through classifying the information disclosure on banks’ web sites into general, financial, investors and corporate governance attributes. All 47 banks in Turkish Banking System have been evaluated according to the index with the aim of providing a comparison between banks. By Chi Square Test, Pearson Correlation, T-Test, and ANOVA statistical tools, it has been concluded that the majority of banks in Turkey have shared information on their web sites adequately with respect to their total index score. Although there is a positive correlation between various types of information on banks’ web sites, there is no uniformity among them. Also, no significant difference between various types of information disclosure and bank types has been observed. Compared with the total index score averages of the five largest banks in Turkey, there are some banks that need to improve the content of their web sites.

Keywords: internet banking, websites evaluation, customer adoption, Turkey

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Authors: İlhami Karahanoglu, Oguz Ceylan

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As its well-known definitions; systemic risk refers to whole economic system down-turn movement even collapse together in very severe cases. In fact, it points out the contagion effects of the defaults. Such a risk is can be depicted with the famous Chinese game of falling domino stones. During and after the Bear & Sterns and Lehman Brothers cases, it was well understood that there is a very strong effect of systemic risk in financial services sector. In this study, we concentrate on the existence of systemic risk in Turkish Banking Sector based upon the Halkbank Case during the end month of 2013; there was a political turmoil in Turkey in which the close relatives of the upper politicians were involved in illegal trading activities. In that operation, the CEO of Halkbank was also arrested and in investigation, Halkbank was considered as part of such illegal actions. That operation had an impact on Halkbanks stock value. The Halkbank stock value during that time interval decreased remarkably, the distributional profile of stock return changed and became more volatile as well as more skewed. In this study, the daily returns of 5 leading banks in Turkish banking sector were used to obtain 48 return distributions (for each month, 90-days-back stock value returns are used) of 5 banks for the period 12/2011-12/2013 (pre operation period) and 12/2013-12/2015 (post operation period). When those distributions are compared with timely manner, interestingly; the distribution of the 5 other leading banks in Turkey, public or private, had also distribution profiles which was different from the past 2011-2013 period just like Halkbank. Those 5 big banks, whose stock values are monitored with sub index in Istanbul stock exchange (BIST) as BN10, had more skewed distribution just following the Halkbank stock return movement during the post operation period, with lover mean value and as well higher volatility. In addition, the correlation between the stock value return distributions of the leading banks after Halkbank case, where the returns are more skewed to the left, increased (which is measured in monthly base before and after the operation). The dependence between those banks was stronger under the case where the stock values were falling compared with the normal market condition. Such distributional effect of stock returns between the leading banks in Turkey, which is valid for down sub-market (financial/banking sector) condition, can be evaluated as an evidence for the existence of contagious effect and systemic risk.

Keywords: financial risk, systemic risk, banking sector, return distribution, dependency structure

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Authors: Anna K. Wood, Terri Friedline

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In April and May 2020, the private banking industry approved over 1.7 million emergency small business loans, totaling over $650 billion in federal relief funds as part of the Paycheck Protection Program (PPP). Since the program’s rollout, the extensive evidence of discriminatory lending and misuse of funds has been revealed by investigative journalism and academic studies. This study is based on 41 interviews with frontline banking industry professionals conducted during the days and weeks of the PPP rollout, presenting a real-time narrative of the program rollout through the eyes of those in the role of a street-level bureaucrat. We present two themes from this data about the conditions under which these frontline workers experienced the PPP: Exigent Timelines and Defaulting to Existing Workplace Norms and Practices. We analyze these themes using literature on street-level organizations, bureaucratic discretion, and the differences between public and private sector logic. The results of this study present new directions for theorizing sector-level differences in street-level bureaucratic discretion in the context of mixed-sector collaboration on public service delivery, particularly under conditions of crisis and urgency.

Keywords: street level bureaucracy, social policy, bureaucratic discretion, public private partnerships

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Authors: Euphrasia Susy Suhendra, Lies Handrijaningsih

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The banking sector as an intermediary party or intermediaries occupies a very important position in bridging the needs of working capital investment in the real sector with funds owner. This will certainly make money more effectively to improve the economic value added. As an intermediary, Islamic banks raise funds from the public and then distribute in the form of financing. In practice, the distribution of funding that is run by Islamic Banking is not as easy as, in theory, because, in fact, there are many financing problems; some are caused by lacking the assessment and supervision of banks to customers. This study aims to analyze the influence of the Third Party Funds, Return on Assets (ROA), Non Performing Financing (NPF), and Financing Deposit Ratio (FDR) to Total Financing provided to the Community by Islamic Banks in Indonesia. The data used is monthly data released by Bank of Indonesia in Islamic Banking Statistics in the time period of January 2009 - December 2013. This study uses cointegration test to see the long-term relationship, and use error correction models to examine the relationship of short-term. The results of this study indicate that the Third Party Fund has a short-term effect on total funding, Return on Assets has a long term effect on the total financing, Non Performing Financing has long-term effects of total financing, and Financing deposit ratio has the effect of short-term and long-term of the total financing provided by Islamic Banks in Indonesia.

Keywords: Islamic banking, third party fund, return on asset, non-performing financing, financing deposit ratio

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Authors: Wesam Hamed

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This paper contributes to the existing literature by investigating the impact of political risks on the capital adequacy ratio in the banking sector of Gulf Cooperation Council (GCC) countries, which is the first attempt for this nexus to the best of our knowledge. The dynamic panel data model (System‐GMM) showed that political risks significantly decrease the capital adequacy ratio in the banking sector. For this purpose, we used political risks, bank-specific, profitability, and macroeconomic variables that are utilized from the data stream database for the period 2005-2017. The results also actively support the “too big to fail” hypothesis. Finally, the robustness results confirm the conclusions derived from the baseline System‐GMM model.

Keywords: capital adequacy ratio, system GMM, GCC, political risks

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Authors: Pocholo Rodriguez, Anne Bernadine Ocampo, Ian Benedict Chan, Janric Micah Gray

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The state of an electric power system may be classified as either stable or unstable. The borderline of stability is at any condition for which a slight change in an unfavourable direction of any pertinent quantity will cause instability. Voltage instability in power distribution systems could lead to voltage collapse and thus power blackouts. The researchers will present an intelligent system using back propagation algorithm that can detect voltage instability and output voltage of a power distribution and classify it as stable or unstable. The researchers’ work is the use of parameters involved in voltage instability as input parameters to the neural network for training and testing purposes that can provide faster detection and monitoring of the power distribution system.

Keywords: back-propagation algorithm, load instability, neural network, power distribution system

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Authors: Aida Alemany, Laura Ballester, Ana González-Urteaga

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From 2007 subprime crisis to the recent Eurozone debt crisis the European banking industry has experienced a terrible financial instability situation with increasing levels of CDS spreads (used as a proxy of credit risk). This paper investigates whether volatility transmission channels in European banking markets have changed after three significant crises’ events during the period January 2006 to March 2013. The global financial crisis is characterized by a unidirectional volatility shocks spillovers effect in credit risk from inside to outside the Eurozone. By contrast, the Eurozone debt crisis is revealed to be local in nature with the euro as the key element suggesting a market fragmentation between distressed peripheral and non-distressed core Eurozone countries, whereas retaining the local currency have acted as a firewall. With these findings we are able to shed light on the impact of the different crises on the European banking credit risk dynamics.

Keywords: CDS spreads, credit risk, volatility spillovers, financial crisis

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Authors: Jingjing Ye, Cijun Fan, Yan Dong

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The development of financial sector plays an important role in shaping industrial structure. However, evidence on the micro-level channels through which this relation manifest remains relatively sparse, particularly for developing countries. In this paper, we compile an industry-by-city dataset based on manufacturing firms and registered banks in 287 Chinese cities from 1998 to 2008. Based on a difference-in-difference approach, we find the highly concentrated banking sector decreases the competitiveness of firms in each manufacturing industry. There are two main reasons: i) bank accessibility successfully fosters firm expansion within each industry, however, only for sufficiently large enterprises; ii) state-owned enterprises are favored by the banking industry in China. The results are robust after considering alternative concentration and external finance dependence measures.

Keywords: bank concentration, China, difference-in-difference, industry structure

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Authors: Rizwan Ali, Hammad Zafar

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The purpose of this research is to investigate the mediation effect of customer satisfaction in the relationship between service quality, corporate image to customer loyalty, in Pakistan banking sector. The population of this research is banking customers and sample size of 210 respondents. This research uses the SPSS, Correlation, ANOVA and regression analysis techniques along with AMOS methods. The service quality and corporate image applied by the banks are not all variables can directly affect customer loyalty, but must first going through satisfaction. Which means that banks must first need to understand what the customer basic needs through variable service quality and corporate image so that the customers feel loyal when the level of satisfaction is resolved. The service quality provided by the banking industry needs to be improved in order to improve customer satisfaction and loyalty of banking services, especially for banks in Pakistan.

Keywords: customer loyalty, service quality, corporate image, customer satisfaction

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Authors: Shaibu Ali, Sherif Heiman Shaban, Musah Ismaila, Imoro Alhassan, Yusif Ali

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Purpose: Islamic banking and finance is one of the most rapidly growing segments of the global finance industry. Starting with the Dubai Islamic Bank in 1975, the number of Islamic financial institutions worldwide has shot up astronomically, to over three hundred, with operations in seventy-five countries and assets in excess of US$400 billion. The purpose of this study is to explore the prospects and challenges of Islamic banking introduction in a non-Islamic country like Ghana. Design/Methodology: Data for the study was collected via an expert opinion of three Islamic scholars on Islamic banking from Ghana. Findings: Findings from this study indicates some of the benefits of Islamic banking includes connecting financial markets and economic activity, promoting the principle of financial justice, greater stability, avoiding economic bubbles (and bursts) and reducing the impact of harmful products and practices. The study also identified lack of experts in various fields of Islamic banking, product innovation, moral hazard, and need for experienced staff in Islamic banking as some of the challenges to Islamic banking system’s introduction. Contribution: The study contributes to literature on Islamic banking from a non-Islamic country like Ghana.

Keywords: Islamic banking, Shari’ah, Riba, conventional banking

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Authors: Farhad Reyazat, Richard Werner

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This paper contributes to the existent literature by developing a framework that explains how to monitor potential threats to banking sector stability. The study explores structural vulnerabilities at the country level, but also look at bilateral exposures within a network context. The study contributes in analysing of the European banking systemic risk at aggregated level, which integrates the characteristics of bank size, and interconnectedness relative to the size of the economy which ultimate risk belong to, taking to account the concentration ratio of the banking industry within the whole economy. The nature of the systemic risk depends on the interplay of the network topology with the nature of financial transactions over the network, assets and buffer stemming from bank size, correlations, and the nature of the shocks to the financial system. The study’s results illustrate the contribution of banks’ size, size of economy and concentration of counterparty exposures to a given country’s banks in explaining its systemic importance, how much the banking network depends on a few traditional hubs activities and the changes of this dependencies over the last 9 years. The role of few of traditional hubs such as Swiss banks and British Banks and also Irish banks- where the financial sector is fairly new and grew strongly between 1990s till 2008- take the fourth position on 2014 reducing the relative size since 2006 where they had the first position. In-degree concentration index analysis in the study shows concentration index of banking network was not changed since financial crisis 2007-8. In-degree concentration index on first quarter of 2014 indicates that US, UK and Germany together, getting over 70% of the network exposures. The result of comparing the in-degree concentration index with 2007-4Q, shows the same group having over 70% of the network exposure, however the UK getting more important role in the hub and the market share of US and Germany are slightly diminished.

Keywords: systemic risk, counterparty risk, financial stability, interconnectedness, banking concentration, european banks risk, network effect on systemic risk, concentration risk

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Authors: Prasansha Kumari

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This paper intends to identify and analyze customer adoption and attitudes towards mobile banking facilities. The study uses six perceived characteristics of innovation that can be used to form a favorable or unfavorable attitude toward an innovation, namely: Relative advantage, compatibility, complexity, trailability, risk, and observability. Collected data were analyzed using Pearson Chi-Square test. The results showed that mobile bank users were predominantly males. There is a growing trend among young, educated customers towards converting to mobile banking in Sri Lanka. The research outcomes suggested that all the six factors are statistically highly significant in influencing mobile banking adoption and attitude formation towards mobile banking in Sri Lanka. The major reasons for adopting mobile banking services are the accessibility and availability of services regardless of time and place. Over the 75 percent of the respondents mentioned that savings in time and effort and low financial costs of conducting mobile banking were advantageous. Issue of security was found to be the most important factor that motivated consumer adoption and attitude formation towards mobile banking. Main barriers to mobile banking were the lack of technological skills, the traditional cash‐carry banking culture, and the lack of awareness and insufficient guidance to using mobile banking.

Keywords: compatibility, complexity, mobile banking, observability, risk

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Authors: Aristeidis Samitas, Stathis Polyzos

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As the UK and the EU prepare to start negotiations for Brexit, it is important for both sides to comprehend the full extent of the consequences of this process. In this paper, we employ an object oriented simulation framework in order to test for the short-term and long-term effects of Brexit on both sides of the Channel. The relative strength of the UK economy and the banking sector vis-à-vis the EU is taken under consideration. Our results confirm predictions in the relevant literature regarding the output cost of Brexit, with particular emphasis on the EU. Furthermore, we show that financial stability is also an important issue on both sides, with the banking system suffering significant losses, particularly over the longer term. Our findings suggest that policymakers should be extremely careful in handling Brexit negotiations, making sure to consider dynamic effects that may be caused by UK bank assets moving to the EU after Brexit. The model results show that, as the UK banking system loses its assets, the end state of the UK economy is deteriorated while the end state of EU economy is improved.

Keywords: Banking Crises, Brexit, Financial Stability, VBanking

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Authors: Shuenn-Yih Chang, Chiu-Li Huang

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Three structure-dependent integration methods have been developed for solving equations of motion, which are second-order ordinary differential equations, for structural dynamics and earthquake engineering applications. Although they generally have the same numerical properties, such as explicit formulation, unconditional stability and second-order accuracy, a different performance is found in solving the free vibration response to either linear elastic or nonlinear systems with high frequency modes. The root cause of this different performance in the free vibration responses is analytically explored herein. As a result, it is verified that a weak instability is responsible for the different performance of the integration methods. In general, a weak instability will result in an inaccurate solution or even numerical instability in the free vibration responses of high frequency modes. As a result, a weak instability must be prohibited for time integration methods.

Keywords: dynamic analysis, high frequency, integration method, overshoot, weak instability

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Authors: J. Erina, I. Erins

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The goals of the present research are to estimate Six Sigma implementation in Latvian commercial banks and to identify the perceived benefits of its implementation. To achieve the goals, the authors used a sequential explanatory method. To obtain empirical data, the authors have developed the questionnaire and adapted it for the employees of Latvian commercial banks. The questions are related to Six Sigma implementation and its perceived benefits. The questionnaire mainly consists of closed questions, the evaluation of which is based on 5 point Likert scale. The obtained empirical data has shown that of the two hypotheses put forward in the present research Hypothesis 1 has to be rejected, while Hypothesis 2 has been partially confirmed. The authors have also faced some research limitations related to the fact that the participants in the questionnaire belong to different rank of the organization hierarchy.

Keywords: six sigma, quality, commercial banking sector, latvian

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Authors: Asif Zaheer Shaikh, Zhaoyong Zhang, Jaime Yong, Ume Laila Shah

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Islamic finance is growing with remarkable pace, especially Islamic banking, a major segment of Islamic finance, is expanding rapidly. This paper discusses the position of Islamic finance and Islamic banking, around the world in general and particularly in Pakistan. History of Islamic banking in Pakistan is protested, presently a significant growth is observed. However Islamic banking is confronting with number of challenges, which are refraining from sustainable growth of this industry in Pakistan. Growth level of Islamic banks should be steeper to contribute substantial share in country’s economy. It is important to formulate effective policies, at institutional and operational level to address these challenges through close collaboration of key stakeholders.

Keywords: Islamic finance, challenges, Islamic banking, Pakistan

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Authors: Bilal Ahmad Malik

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With the fall of Soviet Union in 1991 the whole Central Asian region saw a dramatic rise in Muslim identity, a call back to Islamic legacy. Today, many Central Asian Muslims demand, what Islam has termed legal (Halal) and, avoid what Islam has termed illegal (Haram). The process of Islamic resurgence kicked off very quickly soon after the integration of Central Asian republics with other Muslim geographies through the membership of Organization of Islamic Conference (OIC) and other similar organizations. This interaction proved to be a vital push factor to the already existing indigenous reviving trends and sentiments. As a result, along with many other requirements, Muslim customer demand emerged as navel trend in the market in general and in banking and financial sector in particular. To get this demand fulfilled, the governments of CIS states like Kazakhstan, Uzbekistan, Azerbaijan, Turkmenistan, Kyrgyzstan and Tajikistan introduced Halal banking and financial products in the market. Firstly, the present paper would briefly discuss the core composition of Halal banking and financial products. Then, coming to its major theme, it would try to identify and analyze the causes that lead to the emergence of Islamic banking and finance industry in the Muslim majority Post-Soviet CIS States.

Keywords: causes, Central Asia, interest-free banking, Islamic Revival

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Authors: Amer Alzaidi

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Islamic banking is an alternative solution to those people who are worried about Riba (interest) in all forms of transaction while using banking services and products. Today, banks around the world have Islamic banking services and products the in one form or another. The use of Islamic banking is not only restricted to Muslims world but have reached to non-Muslim countries like UK, USA, Australia and Canada as well. Compared to conventional banking, the adoption rate of Islamic banking is low because of unawareness of customers, financial cost, and performance issues. The interest in Islamic banking by financial institutions as well as low adoption rate motivated us to look this matter into detail in order to identify Critical Success Factors, which are positively motivating customers to use Islamic banking services/ products and Critical Risk Factors, which have significantly negative effect on the adoption of Islamic banking. The CSFs and CRFs will be initially identified from the literature using methodology called Systematic Literature Review, followed by the empirical analysis of these factors using survey research method. Later, we will develop Islamic Banking Adoption Model (IBAM) to help banks to assess their Islamic banking strategic positioning and to improve their operational efficiency. The first potential contribution of this research study will be the development of IBAM protocol that will provide us guidelines for conducting our actual SLR. The second major contribution of this research will be the development of Islamic Banking Adoption Model (IBAM), and the third contribution of this research study will be the evaluation of the developed IBMA.

Keywords: Islamic banking, adoption model, protocol, technology

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Authors: Pradeep Kulshrestha, Maulana Ayoub Ali

Abstract:

The concept of financial inclusion has been tabled in the whole world where practitioners, academicians, policy makers and economists are working hard to look for the best possible opportunities in order to enable the whole society to be in the banking cycle. The Islamic banking system is considered to be one of the said opportunities. Countries like the United Kingdom, United States of America, Malaysia, Saudi Arabia, the whole of the United Arab Emirates and many African countries have accommodated the aspect of Islamic banking in the conventional banking system as one of the financial inclusion strategies. This paper tries to analyse the current state of affairs of the Islamic Banking system in Tanzania in order to understand the improvement of the provision of Islamic banking products and services in the said country. The paper discusses the historical background of the banking system in Tanzania, the level of penetration of banking products and services and the coming of the Islamic banking system in the country. Furthermore, the paper discusses banking regulatory bodies, legal instruments governing banking operations as well as number of legal challenges facing Islamic banking operations in the country. Following a critical literature review, the paper discovered that there is no legal instrument which talks about the introduction and provision of Islamic banking system in Tanzania. Furthermore, the Islamic banking system was considered as a banking product which is absolutely incorrect because Islamic banking is considered to be as a banking system of its own. In addition to that, it has been discovered that lack of a proper regulatory system and legal instruments to harmonize the conventional and Islamic banking systems has resulted in the closure of one Islamic window in the country, which in the end affects the credibility of the newly introduced banking system. In its conclusive remarks, the paper suggests that Tanzania should work on all legal challenges affecting the smooth operations of the Islamic banking system. This can be in a way of adopting various Islamic banking legal models which are used in countries like Malaysia and others, or a borrowing legal harmonization process which has been adopted by the UK, Uganda, Nigeria and Kenya.

Keywords: Islamic banking, Islamic windows, regulations, banks

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Authors: Ayoub Ali Maulana

Abstract:

“The success and sustainability of an Islamic finance system depends on the ability to establish a comprehensive legal and regulatory framework that supports synergy amongst the components in the system”. Numbers of banks have introduced Islamic banking windows claiming that their products follow Islamic banking values without any compromise. National Bank of Commerce Limited, Stanbic Bank Limited, Kenya Commercial Bank, The Peoples Bank of Zanzibar and Amana Bank Limited are some of the banks which offer Islamic banking products in Tanzania. To date, there is no single provision in Tanzanian laws that speak of Islamic banking activities in the country. Despite the fact that consultancy commissioned to International Monetary Fund (IMF) to research on the best laws to govern Islamic banking industry in the country, the speed is not encouraging in making sure that the same is introduced as soon as possible. This paper highlights the trend of the banking services in Tanzania and examines the application of Islamic banking system in the Tanzanian conventional banking environment. In particular the paper considers whether the Islamic banking services in Tanzania can survive without an appropriate legal framework that accommodates it.

Keywords: islamic banks, interest, islamic windows, Tanzania

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Authors: Abdulaziz Abdulsaleh

Abstract:

This study aims at identifying the practices that should be taken into consideration by audit committees as a tool of corporate governance in Libyan commercial banks by investigating various perceptions on this topic. The study is based on a questionnaire submitted to audit committees ‘members at Libyan commercial banks, directors of internal audit departments as well as members of board of directors at these banks in addition to a number of external auditors and academic staff from Libyan universities. The study reveals that the role of audit committees has to be shifted from traditional areas of accounting to a broader role including functions related to financial reporting, audit planning, support the independence of internal and external auditors, acting as a channel of communication between external auditors and board of directors, reviewing external audit, and evaluating internal control systems. Although the study is a starting point in developing a framework of good audit committees’ practices in Libya, it is believed that the adoption of its results can result in enhancing the corporate governance practices not only in the banking sector but also in the entire corporate sector in Libya.

Keywords: audit committees, corporate governance, commercial banks, Libya

Procedia PDF Downloads 370