E. LEGAL/COMPLIANCE RISK: Legal risk is the risk of non-compliance with legal or regulatory requirements. The legal risks are directly related to the electronic banking and they are increased as its use is extended. They mainly stem from the uncertainty that exists in the legal – regulative framework concerning the electronic banking. In most countries an explicit regulating framework does not exist and this is owed to the little experience regarding the sector of electronic banking. The problem becomes even bigger when a bank offers its electronic services to other countries as well, since a unified legal frame in international level does not exist. Each country puts its own rules into effect and it is difficult for a bank to constantly adapt its services and to be acquainted with all the laws that are in effect in every country. Another legal risk is related with the protection of the customers’ personal data. Bad use by the bank personnel or by exterior malignant intruders can expose a bank in serious legal risks. It is possible that the intruders acquire access in the databases of the banks and use the data of customers in order to commit a fraud. In this case a legal risk is created by the bad or not certified use of customers‟ data. The legal risks, in which the financial institutions will be exposed from the use of electronic banking, are expected to increase because of the uncertainty that characterizes the wider legal framework and the specific lawful regulations of transactions through an open electronic network as the internet is. The uncertainty with regard to the validity of transactions, the protection of personal data, the involuntary consumer’s exposure to foreign jurisdiction, the tax evasion, the laundering of money, the electronic fraud but also the legal responsibility in case a system collapses, increase the exposure to the legal regulatory risks
Page 246 weights are assigned in order of importance i.e. 1 to Strongly Disagree (SD), 2 to Disagree (A), 3 to Neutral, 4 to Agree (A), and 5 to Strongly Agree (SA). To examine the bankers’ viewpoints towards factors responsible for e-banking risks, their potential impacts, and the risk management measures taken by the selected banks; ANOVA technique was employed to test the hypotheses and validate the results. The analysis is in conformity with the objectives of the study and the hypotheses formulated. The collected data are analyzed through PASW 18.0 version.
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Abstract: This study aims to determine the management practices of the banking Industry in the Kingdom of Bahrain and their level of effectiveness. Specifically, it will seek to answers the following sub-problems: (1) The status of the management practices in the banking industry in the Kingdom of Bahrain in terms of the following: a) Investment management, b) Operation management, c) Risk Management, d) Strategy Management, and e) Local and global banking; (2) The level of effectiveness in the implementation of management practices of the banking industry in the Kingdom of Bahrain in terms of the following: a) Investment management, b) Operation management, c) Risk Management, d) Strategy Management, and e) Local and global banking; (3) Significant relationship between the status of management practices and the level of effectiveness of the implementation of the management practices of the banking industry in the kingdom of Bahrain; (4) The problems encountered by the respondents in the implementation of management practices in the banking industry in the kingdom of Bahrain; and (5) Recommendations can be proposed by the respondents to enhance the implementation of the management practices in the banking industry in the Kingdom of Bahrain. There are common problems encountered by the respondents on the management practices in the banking industry such as: lack of seminars and training of credit staff and other bank employees, inability to correct problems and implement appropriate risk management practices, inability to correct problems and implement appropriate risk management practices, political influences when approving the loan. The least problem perceived was on management decision is not scrutinized by independent audit process. The following recommendations were: (1) Building good relations with the depositors is by giving trainings; seminars to the employees of the banks; (2) The policies must be in conformity to the rules and regulations of the banks specifically on risk management; (3) Strategizing it is not on the technology itself of the bank- the bank focus mainly to the manpower who has the know-how, expertise and skills; (4) Local/Global – Clients/employees are treated as co-owners of the bank, which will give goodwill to banks vice versa; (5) Globally banking industry in Bahrain open doors to invite people here in Bahrain invests attracting them, to invest in exchange of good privilege; and 6) Bahrain Bankers alliances are united as one to have annual seminars to improve and up-dates the banks regarding their performance that contributes developing in the kingdom of Bahrain.
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The Banking sector has a pivotal role in the development of an economy. It has a dynamic role to play in converting the idle capital resources for their optimum utilisation so as to attain maximum productivity. In fact, the foundation of a sound economy depends on how sound the Banking sector is and vice versa. In India, the banking sector is considerably strong at present but at the same time, banking is considered to be a very risky business. Financial institutions must take risk, but they must do so consciously. Risk Management is the importance to business strategy in order to plan, direct, organize, and control the wide variety of risks in the organizations along with the daily and long-term functioning. Risk Management accounts to the circumstances of risk management techniques in the business. To review and estimate financial risk management on-site trips to financial service firms were carried out since the past years. Like it or not, risk has circumstances in the attainment of goals and in the general success of a business. This Present paper makes an attempt to identify and analyse the risks faced by the banking industry and the process of risk management and also examine the different techniques adopted by banking industry to manage risk. To study the present paper objectives data has been collected from secondary sources i.e., from Books, journals and online publications. The information collected covers the performance of financial risk management. As a final point it can be concluded that the banks should take risk more consciously, willfully, predicts adverse changes and prevaricates accordingly, it becomes a source of competitive advantage, and efficient management of the banking industry.
The future for both credit risk management and Takaful is very bright and promising as western scholars and investors are paying more interest to them, especially to counterfeit problems associated with the conventional financing system. In 1990, the establishment of the Institute of Islamic banking and Insurance (IIBI) in UK is an important indicator of the importance and rise of this vital economic activity around the world. In USA the situation is more favorable for Islamic finance system as we see a list of conventional commercial banks that are operating Islamic banking and insurance system i.e. HSBC, Devon Bank of Chicago, Deutsche Bank, JP Morgan Chase, and University Bank -Ann Arbor. These banks along with their conventional banking are offering Islamic banking system to its clients. Mortgages from Islamic Banking units of these conventional banks have been purchased by Freddie Mac and Fannie Mae companies. Also, many universities are keen to develop this topic due to its high demand in world job market. We should expect shariah compliance Islamic finance scholars to educate the common to abolish the myths which hinder the large Muslim community about Islamic finance products and play a progressive role in assisting economic and financial experts in order to widen the use of these Islamic techniques to cope with the conventional financial products.
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The collected data were analyzed through descriptive statistical techniques like frequency distribution, percentage, mean, mode, standard deviation. For coding and analyzing the data, weights are assigned in order of importance i.e. 1 to Strongly Disagree (SD), 2 to Disagree (A), 3 to Neutral, 4 to Agree (A), and 5 to Strongly Agree (SA). To examine the bankers’ viewpoints towards factors responsible for e-banking risks, their potential impacts, and the risk management measures taken by the selected banks; ANOVA technique was employed to test the hypotheses and validate the results. The analysis is in conformity with the objectives of the study and the hypotheses formulated. The collected data are analyzed through PASW 18.0 version.
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This is evaluated by the level of acceptance to the changes in market prices, and in that they are similar to interest rates, exchange rates, equity values and commodity prices. To some extent, similar concepts are also held valid in Islamic banks. But according to the interest prohibition stipulated in Shari‟ah, Islamic banks are impacted by interest rate risks indirectly in case of price mark-up of postponed sale and lease- based transactions. On the other hand, Islamic banks are openly susceptible to commodity price risk because they bear inventory items, i.e. in mark-up or leased transactions. They are also susceptible to equity price risk compared to their traditional counterparts owing to the Islamic banking nature where equity is financed through PLS modes. Moreover, Islamic banks are exposed to risks associated with exchange rate as traditional banks are. On the contrary, Islamic banks possess fewer risk hedging prospects compared to conventional ones because the according Shari‟ah views risk hedging tools like future risks, swap contracts and options are out of reach of Islamic banks at the current Islamic financing condition.
Polatoglu and Ekin (2001a) examined the factors affecting adoption of e-banking among Turkish bank consumers. They included consumer related factors as well as the organizational factors. The study also focused on the demographic factors of the consumers. Laukkanen and Pasanen (2008) conducted a survey in a Scandinavian bank in Finland. The study revealed the differences between the adoption rates between innovators, early adopters and other users. Fawzy and Esawai (2017) used technology acceptance model to investigate the factors affecting adoption of E- banking in public and private banks in Egypt. Nasri (2011) studied the factors affecting adoption of e-banking in Tunisia. The test of their model revealed that convenience, risk, security and prior internet knowledge influence adoption. They also considered demographic factors affecting consumer e- bankingbehavior. Akinci et al. (2004a) focused their research on the academicians and their behavior in adoption of e- banking services. They explored the demographic, attitudinal and behavioral characteristics. Supathanish (2010) investigated the barriers to adoption of e-banking. The study based in Thailand found factors like lack of awareness, lack of trust and lack of perception for E-banking. Wai-Ching (2008b) tested ten attributes of e-banking adoption in Malaysia and found all of them to be significant. These attributes are convenience of usage, accessibility, features availability, bank management and image, security, privacy, design, content, speed, and fees and charges. Familiarity with computers and technology is also an important factor that affects the adoption of e-banking (Karjaluoto et al., 2002a;Ghazinoory&Afshari- Mofrad, 2012;Igbaria et al., 1995;Servon and Kaestner; 2008).
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the IMF stated that the global credit crunch had cost governments over $10 trillion already (Schifferes, 2009). With large capital injections and bailouts many governments and the IMF tried to save the financial system. Ultimately this led to a financial crisis also involving governments. Both the costs of the capital injections and the increased public and regulatory awareness of governmental debts led to major budget cuts; the financial crisis had reached the real economy. Credit rating agencies downgraded sovereign debts of many countries; on August 5 Standard & Poor’s cut the U.S. sovereign debt rating for the first time in history (Tabuchi, 2011). It became clear that even traditional safe havens, as U.S. sovereign bonds are not ‘safe’; in fact they hold some risk. During the crisis there were times (2008-‐2009, early August 2011) that the ten-‐ year U.S. Treasury bond yield dropped below the S&P 500’s dividend yield (Sommer, 2011).
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The higher amount of financing provided has an effect on the increasing income, and the higher income can increase profitability. It will happen if the quality of the financing is good and there is no or low level of non- performing financing. However, if the process of financing is not performed well, it can result in high NPF which ultimately lower the profitability. Therefore, the management needs to be careful in providing financing. The financing analysis should be performed in accordance with the SOP in order to anticipate the occurrence of non- performing financing. As seen from the statistic of FDR of the Islamic Rural Banks, it is very good with an average of 96,09%, although there is a Islamic Rural Bank which reached a very high average of 384,01%. The bank management must maintain its commitment to FDR in accordance with the requirement set by the government between 70% and 95%. Yusuf and Mahriana (2016) who conducted research on Rural Banks in Aceh also found a significant and positive effect between FDR and bank performance (ROA). Similarly, Youssef and Samir (2015) and Sanwari and Zakaria (2013) also found a significant effect between liquidity (LDR) and bank performance. However, the results of research conducted by Sudiyatno (2010) found that there is no significant effect. Likewise, Mahmud et al. (2016); Milhem and Istaiteyeh (2015) also found that liquidity risk has no effect on bank performance.
In this study they have founded that while big banks stillconduct the bulk of their business in brick and mortar bank branches, the financesector has been increasingly investing on e-banking facilities to offer 24-hour, queue-free services to their regular clients, whether through ATM machines, mobile phonesor the Internet. "E- Banking's appeal is primarily its convenience. Clients nowadayswant instant results; they don't want to wait anymore," said Francisco M. Caparros,Jr., senior vice-president of Asia United Bank and president of Banc Net. It's alsoturned out to be a more efficient way to process transactions, as e-banking does awaywith most of the paperwork that clients have to accomplish. "A lot of people don't likefilling forms," Mr. Caparros added. "Online banking, in particular, relies on usernames and passwords which need to be protected," said Ferdinand G. La Chica, firstvice-president and marketing group head for Sterling Bank of Asia. These anti- theftbarriers are at times supplemented by transaction passwords and "tokens", often akeychain-like device that is issued to the client and generates random, one-timepasswords to enable him to log into his account online. Last year, the Rural Bank Association of the Philippines announced that its members are looking to appointlocal merchants like sari-sari stores as third party agents where consumers can opennew accounts and make large payments. Such informal outlets will enable banks toreach out to small-income businesses and individuals, particularly those in theagrarian sector, most of who are based outside the city center.
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Data Mining not only help in making new customers but it can also help in retaining existing customers . Customer acquisition as well as retention are concerns of banking industry . Nowadays customers are having lot of options where they are having choice of their business. Data Mining can help in targeting new customer for products and in detecting a customer’s previous purchasing patterns on basis of which bank can be able to retain its existing customers.
According to Tariqullah Khan and Habib Ahmed (2001), the lack of mudharabah and musharakah instrument by IFIs is mainly due to its high credit risk. According to the authors, this is mainly due to the instrument of Islamic financing facility does not require any collateral. As a result, there will be some moral hazard by counterparty to remit the profit share of IFI. In addition, IFI may have information asymmetry on performance of the venture which may result in them not understanding the current business situation. Coupled with the lack of competencies of IFI in project evaluation may further jeopardize IFI share of profit. To add salt to the wound, regulations or institutional treatment on tax, accounting and regulatory framework caused mudharabah and musharakah not in favour of IFI.
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financial performance (ROA). Bank management must maintain the level of Non-Performing Loan (NPL) to not exceed the standard set by the government. The level of Non-Performing Loan (NPL) can affect the level of bank’s financial performance. In the present study, credit risk (NPL) didn’t significantly affect bank’s financial performance. It could be because the levels of Non-Performing Loan (NPL) of the five banks being studied were small, no more than 5% and the mean was less than 3%. The research result supported the studies by Badawi (2017), Capriani and Dana (2016), Sutrino (2016) which state that credit risk measured by Non- Performing Loan (NPL) didn’t affect financial performance.
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The purpose of the study was to achieve an understanding ofcustomers’ acceptance of E-Banking in twin cities of Pakistan underfive variables. Structure established for the research anticipated that usage of E-banking is influenced by perceived usefulness, privacy and security, trust, web design and self-efficacy.Banks are providing E-banking facilitiesas they believe this service is likely to enhance their profits, which makes growing the acceptance rate a dominant issue. Banks should consider that web content info productivity plays an importantpart in influencing consumers’ decisions to use a banking web site, directing to restricted financial services info and low financial services comparability as one of the reasons of unwillingness to participate in E-banking activities. So giving detailed and up-to-date info on the financial services offered online, links to other sections or web sites with supplementary information such as news or expert evaluations, or giving clients with simulants so that the costs of a financial product can be calculated when the consumer enter their preferences can lessen this type of risk.
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Present scenario, E-banking services play major role for giving more satisfaction to customer, and retaining existing customers towards them. The major objective of this research paper was to study Customer satisfaction towards e-Banking services, there are two major objective and data collected with through questionnaire. It was analysed by the percentages and ANOVAs. As per results 28% of respondents in the group of 26-30 years and 27% of respondents in the group of 31-35 years, followed with 70% of the respondents belonged male, 30% of respondents belonged female, 42% of respondents studied Degree and 28% of respondents studied PG, 39% of respondents working as a Private Employees, 23% are the Govt. employees, and finally, 34% of respondents earned Rs.20,001-30,000 for month and 28% of respondents earned above Rs.30,000-40,001. The results of the ANOVAs from the HO 1 found that there is a significant impact E-Banking services on demographical variable
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The pre and post liberalization era has witnessed various environmental changes, which directly affects the previously mentioned phenomena. It is evident that post liberalization era has spread new colours of growth in India, but simultaneously it has also posed some challenges. This article discusses the various challenges and opportunities like High transaction costs, IT revolution, timely technological up-gradation, intense competition, privacy & safety, global banking, financial inclusion. Banks are striving to combat the competition. The competition from global banks and technological innovation has compelled the banks to rethink their policies and strategies. Different products provided by foreign banks to Indian customers have forced the Indian banks to diversity and upgrade themselves so as to compete and survive in the market.
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Banking in India, begins in the last decades of the 18 th Century. In India, only those Banks are called Commercial Banks which have been established in accordance with Indian Companies Act 1913. These Banks were established in India after the Advent of the East Indian Company. Bank of Hindustan was the first commercial Bank in India. It was established in 1770. The important commercial Banks in India are Central Bank of India, Punjab National Bank, Indian Bank, Bank of Baroda, State Bank of India.
The ratio x14 that measures the ability of a bank to pay back its debts, records quite a high ratio and consequently the defect response is also high. It is evident that, if the size of bank debt is so imposing compared to savings and banking capital, the bank is then found unable to honor its commitment towards their lenders. In fact, the inability of repayment pushes banks into difficulties to resort to fish-out service of the lender as last resort otherwise bankruptcy and judiciary liquidation. The response absence of defect is evident to an X= x5 and X=x8 with a null odds ratio. Hence, the defect response is of 0.92, 0.74 times respectively for an X=x9 and X=x12.
Taking into account the fact that the banking system plays a crucial role in any national economy as a central pillar in its functions: lending the real economy and acting as a payment system-base regulation and prudential supervision of the banking system is the main component and also a prerequisite for ensuring and maintaining the financial and economic health of a country. Regardless of the approach, credit risk is the main cause of bank failures and from here the need for the imposition of minimum requirements in managing credit risk and also liquidity risk is seen as the risk of disruptions in providing liquid funds of the bank.