Phd in Banking and Finance

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    Agriculture Finance by Islamic Banks for Crop Farmers of Punjab Pakistan: Challenges and Solutions
    (UMT, Lahore, 2023) MASOOMA BATOOL
    The major sector responsible to supply food is the agriculture and for Pakistan it is considered as backbone. In Pakistan, the agriculture sector has enough potential to contribute to uplifting the economy. The current study is focused on the crop (including tunnel farming) sector and its management of agricultural financial needs through formal and informal sources. In Pakistan full fledged Islamic banks are one of the formal sources of getting agriculture finance for farmers. But this formal source of getting agricultural finance is observed not reaching the massive farmers community out there especially in rural areas. So the current research studies the challenges/solutions for this formal source (full-fledged Islamic banks) and crop/tunnel farmers community of Punjab Pakistan to manage financial requirements of farmers.
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    Augmenting disaggregated output growth through Islamic bank financing optimization
    (UMT, Lahore, 2024) Sadia Yasmin
    Finance is widely regarded as vital to the functioning and vitality of an economy, playing a crucial role in driving a nation's progress and maintaining its stability. However, this perception has been called into two propositions, (1) ‘More finance more growth’ formed U-shaped profile and (2) ‘too much finance harm economic growth’ formed inverted U-shaped profile. Available literature has presented inconsistent results by solely considering a single indicator of total Islamic financing either on heterogenous or homogenous group of countries. Since the setoral composition of every country is different, therefore financing can impact differently. To fill the gap, this study has been conducted on a developed islamic banking market of Malayisa and a developing market of Pakistan by decomposing Islamic bank financing into two distinct components: Islamic producer financing and Islamic consumer financing. By using quarterly data from 2010:Q1 to 2020:Q4, this study places special emphasis on examining the nonlinear impacts of financing on disaggregated output growth. Based upon quantitative time series analysis, this study has employed autoregressive distributive lag (ARDL) with nonlinear specifications. The estimated coefficients further plotted to visualize the relationship moderation between financing and growth in the economy by using Dawson (2014) approach. Empirical estimations provided different outcomes of relationship moderation based upon each model of the study and further proposes the notion of ‘more optimized finance, more growth’.
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    Augmenting disaggregated output growth through Islamic bank financing optimization
    (UMT, Lahore, 2024) Sadia Yasmin
    Finance is widely regarded as vital to the functioning and vitality of an economy, playing a crucial role in driving a nation's progress and maintaining its stability. However, this perception has been called into two propositions, (1) ‘More finance more growth’ formed U-shaped profile and (2) ‘too much finance harm economic growth’ formed inverted U-shaped profile. Available literature has presented inconsistent results by solely considering a single indicator of total Islamic financing either on heterogenous or homogenous group of countries. Since the setoral composition of every country is different, therefore financing can impact differently. To fill the gap, this study has been conducted on a developed islamic banking market of Malayisa and a developing market of Pakistan by decomposing Islamic bank financing into two distinct components: Islamic producer financing and Islamic consumer financing. By using quarterly data from 2010:Q1 to 2020:Q4, this study places special emphasis on examining the nonlinear impacts of financing on disaggregated output growth. Based upon quantitative time series analysis, this study has employed autoregressive distributive lag (ARDL) with nonlinear specifications. The estimated coefficients further plotted to visualize the relationship moderation between financing and growth in the economy by using Dawson (2014) approach. Empirical estimations provided different outcomes of relationship moderation based upon each model of the study and further proposes the notion of ‘more optimized finance, more growth’. This study emphasized the significance of striking a balance and optimizing the level of finance to achieve maximum economic growth. Its primary objective is to ascertain the appropriate financial ceiling that effectively regulates financial activities, while also recognizing the criticality of threshold points for regulatory authorities. In both Pakistan and Malaysia, policymakers ought to reconsider the Islamic financial development policies to fully leverage the significant potential of the Islamic finance sector for economic growth. It is imperative to take further steps to liberalizing the Islamic financial system, thereby eliminating financial constraints, espacialy considering its connection to KIBOR in pakistan. The diminishing effect observed near the financing threshold underscores the need for meticulous attention and effective measures to be taken.
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    Challenges in Adoption of Salam Financing for Agriculture Sector Development in Pakistan
    (UMT, Lahore, 2024) Tahir Mehmood
    Background: The agriculture sector provides food and labour employment facilities in every country. In developing countries, though most of the population is involved in agriculture, they are stuck in traditional farming methods with little or no equity capital. The agriculture sector depends on the credit supply function. There are three major players. First government-owned institution, then the usurious banking system, and lastly the Middleman (Arthi) who provides informal loans. These economic agents did not give the Shari’ah based agri-financing facilities and are charging interest (usury) for providing credit facilities to the farmer without risk participation. Islamic banking was new in Pakistan, and did not involve the agriculture sector much. The Islamic mode of finance Salam is the best substitute of conventional financing, which helps to boost productivity, eliminate the riba factor, and provide easy financing to the agriculture sector. Many studies have discussed the financial problems of the farmers and the agriculture sector, but it was lacking in discussing the issues related to the Salam product developers.
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    IMPACT OF EMPLOYABILITY SKILLS ON THE PERFORMANCE OF ISLAMIC BANKS MEDIATING ROLE OF SHARIA'H
    (UMT, Lahore, 2024) Afia Mushtaq
    Background of the Study: The economic value of an organisation can be enhanced through its human resources who possess the requisite skills, knowledge and expertise. Human resources employed by organisations are considered the fundamental organisational asset required to facilitate achieving business goals. The Islamic banking and finance industry has a complex operating environment may create HR challenges in having the right people in the right job. Purpose: The current study examines the impact of the employability skills of Islamic finance graduates on Islamic bank performance. The study also investigates how Islamic finance graduates Sharia'h exposure mediates the relationship between the employability skills of Islamic bank graduates and the Islamic bank performance in Pakistan. Methods: An empirical primary data-based study is conducted through a survey-based questionnaire to collect data from 394 Islamic bankers from five full-fledged Islamic banks and six conventional banks with more than 100 Islamic branches in Pakistan. Findings/Outcomes: The empirical findings show that employability skills significantly impact the performance of Islamic banks in Pakistan. The study further contributed that Islamic finance graduates' Shariah exposure is a significant factor in enhancing the performance of the Islamic banking sector of Pakistan besides employability skills and subject knowledge. Conclusion: Skilled HR availability is the need of a significantly growing IBF industry. The changing business environment emphasises education, developing employability skills and acquiring subject-specific knowledge and Sharia'h exposure. Research Implications: The bank's management, academicians, decision-makers, and policymakers try to optimise the graduate skills through educational programs and by providing employability skills to increase the performance of the Islamic banking stream so that true talent comes into the Islamic banking and finance industry from the academia to cope the challenges that this industry in Pakistan and across the globe is currently facing
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    INFLUENCE OF CORPORATE GOVERNANCE ON CREDIT RATING OF ISLAMIC AND CONVENTIONAL BANKS IN PAKISTAN
    (UMT, Lahore, 2023) Ali Salman
    Credit rating organizations play a significant role in the development of the financial sector by enabling lenders and borrowers to express their professional opinions about an institution's capacity to fulfill its financial obligations through credit ratings. Credit rating agencies analyze corporate governance to determine an institution's creditworthiness. Perhaps Shariah compliance in Islamic banks supports better corporate governance, which, in turn, results in higher credit ratings compared to conventional banks. This study examines whether Islamic and conventional banks in Pakistan with good corporate governance attributes receive higher credit ratings than banks with bad corporate governance. Descriptive statistics, Pearson correlation, multicollinearity test, and an ordered logistic regression are employed to test the relationship between corporate governance attributes and credit rating. Three models are employed to test the relationship between dependent variables (credit rating) and independent variables (corporate governance attributes). Model A covers Islamic banks, model B covers Islamic and model C includes both Islamic and conventional banks. All three models adopt log likelihood, Wald Chi-squares, and generalised R-square tests to assess the significance of the model parameters and fitness of the model. Data was collected for 22 Islamic and conventional banks over a period of 13 years, from 2007 to 2020. The results demonstrate a significant negative correlation between board size, busy directors, and shariah board size and Islamic banks' credit ratings. Independent boards, female directors, board meetings, listing shares, audit committee size, and total assets show a significant positive relationship with Islamic banks' credit ratings. While in conventional banks, blockholders, foreign investors, listing shares, and leverage ratios have significant negative relationships with credit ratings. In Panel Study, Islamic and conventional banks' credit ratings are negatively impacted by board size, blockholders, and capital adequacy ratio. Board independence, female directors, board meetings, listing shares, and audit committee size have a significant positive correlation in both Islamic and conventional banks with credit ratings. Shariah supervisory board is the major distinguishing factor between Islamic and conventional banks. The findings show that shariah board composition has a significant positive impact on Islamic banks' credit ratings, shariah board size has a significant negative impact, and shariah supervisors' training and board expertise have an insignificantly negative impact. The findings suggest that the Shariah board in Islamic banks works in addition to the corporate board as a monitoring body. Its main responsibility is to make sure that all laws, rules, and corporate governance guidelines are followed. This dual oversight helps improve the Islamic banks' creditworthiness. Academics, regulatory organizations, and practitioners can use the results to make more informed decisions, which will help in the growth of a sound Islamic banking system in Pakistan, and completely and confidently switch to a sole Islamic banking system
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    Islamic Banking Model in the Light of Maqasid al Shariah: A Way Forward
    (UMT, Lahore, 2024) Muhammad Nadeem Khalil
    Islamic banking has made tremendous growth over the last twenty years all over the world including Pakistan. However various studies conducted by well-renowned researchers indicate Islamic banks have failed to achieve Maqasid al Shariah. Socioeconomic indicators in Pakistan also support the results of these research studies with increasing poverty, unemployment, and unequal distribution of wealth in Pakistan which indicates Islamic banks are not contributing effectively towards the socio-economic well-being of the people and achieving Maqasid al Shariah. The objective of conducting this study is to evaluate the current practices of Islamic banks in the light of Maqasid al Shariah, analyze why Islamic banks have failed in achieving Maqsid al-Shariah, and then develop an Islamic banking model in the light of Maqasid al Shariah to achieve Maqsid al-Shariah. To achieve this objective, this study employs a qualitative, exploratory research methodology in which face-to-face semi structured interviews with Shariah Supervisory Board (SBB) members of Islamic banks, Shariah scholars, academicians, and policymakers are conducted by using a non-probability purposive sampling technique. A total of 46 participants for this study is contacted out of which 20 participants are interviewed keeping in view the purpose and nature of the study. The grounded theory approach is used in this research and data is analyzed by using NVIVO software. The results of this study show that current practices of Islamic banks are not achieving Maqasid al Shariah and there is a dire need of developing and new model of Islamic banking to achieve Maqasid al Shariah. In addition, factors due to which Islamic banks have failed to achieve Maqasid al Shariah are also identified. The role of various stakeholders such as the government, regulator of Islamic banks (State Bank of Pakistan), Islamic banks, and the general public has been identified for the development of the Islamic banking model in the light of Maqasid al Shariah. Fruitful recommendations regarding the opening of current accounts, Mudaraba accounts, subsidiary Mudaraba companies accounts, restricted accounts, Wakala accounts, Waqf accounts, charity accounts, Zakat accounts, and practical procedure of Musharakah and Mudarabah financing, etc. are made for structuring the asset and liability side of Islamic banks for the development of the Islamic banking model in the light of Maqasid al Shariah.
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    Progression of the Islamic Finance Industry of Pakistan by the Development and Adoption of Fintech
    (UMT, Lahore, 2023) Muhammad Shahid Siddique
    Fintech can dramatically change the procedures and structure of financial services positively. Artificial Intelligence, Blockchain, the Internet of Things, and Cloud computing are four major technologies that are and will shape the future of different sectors of an economy including the Islamic financial industry. Islamic finance has the potential to grow rapidly in Pakistan. The core purpose of this study is to explore the potential impact on the performance of Islamic financial institutions in Pakistan if Fintech is adopted by these institutions. Complimentary purposes include the understanding of the ecosystem for Fintech development in Pakistan, issues in the way of development and adoption of Fintech, and the proposed solutions. For this, the grounded theory method of qualitative research has been used. Data is collected through semi-structured interviews of 25 experts belonging to different categories of actors forming the ecosystem of Islamic Fintech in Pakistan. It has been found that the development and adoption of Fintech will increase the performance of Islamic financial institutions and will increase financial inclusion. For this, every actor in the ecosystem of Islamic Fintech needs to play its role. The ecosystem for the Islamic Fintech model includes the Government, financial institutions, Shariah scholars, customers, technology companies, regulators like SBP and SECP, and Universities. Government is the most vital actor that needs to develop short-term and long-term policies and take immediate steps for the development of Fintech in the country. Pakistan needs to develop Infrastructure for IT & Telecom, make long-term policies for Islamic Financial Technology and provide rewards to Islamic FinancialTechnology experts as per the international market.
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    THE MODERATING ROLE OF ISLAMIC FINANCING ON FINANCIAL DEVELOPMENT AND ENTREPRENEURSHIP– A PANEL DATA ANALYSIS
    (UMT, Lahore, 2023) Hadia Sohail
    Background: Empirically, access to finance is the major constraint found by studies related to entrepreneurial finance. The conventional system does not favour entrepreneurship and risk transfer, and fixed returns-based lending may do more harm to the new venture than good. Muslim entrepreneurs feel reluctant to acquire usurious financing for their business needs. Thus, in most Muslim countries, the financial system is not playing a fruitful role in promoting entrepreneurship. In comparison, Islamic finance provides a participative and equitable alternative for new ventures.
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