International Journal of Electronic Banking (8 papers in press)
Corporate governance disclosure compliance: A comparison between conventional and Islamic banks
by Abdul Quddoos AbdulBasith, Zaki Khalid Abu-Shawish, A.A. Ousama
Abstract: The paper examines the extent and trend of corporate governance (CG) disclosure compliance by listed conventional and Islamic banks in Qatar, the UAE (Dubai) and KSA. The data was collected from the annual and CG reports of sampled conventional and Islamic banks from 2010-2012. The study used a disclosure index to measure CG disclosure compliance. The study found that conventional banks had more compliance compared to Islamic banks. The findings are considered interesting for banks, stakeholders and the relevant authorities in the GCC countries. It helps banks, both conventional and Islamic; better understand their current compliance of CG disclosure practices, so that they could be able to identify the current challenges, hence reduce the gap of none-compliance. The extent of the disclosure has increased in the banks for the sample period overall. The CBs had a better DI score over the two categories for both Qatar and the UAE, while the KSA samples of IBs had a better overall score. Also, the findings are essential for the authorities in Qatar, UAE and KSA to identify the strength and weakness of compliance with the CG code, thereby providing a platform to make the necessary actions to improve it. Moreover, the findings are considered beneficial for the other stakeholders (e.g. shareholders, investors) to understand current CG practices by conventional and Islamic banks in Qatar. Thus, they may better evaluate their performance and governance for decision making. The paper can be considered among the pioneer studies that examine the compliance of CG disclosure and compare it between conventional and Islamic financial institutions in the GCC region.
Keywords: Corporate governance; code; compliance; conventional banks; Islamic banks; Qatar; Saudi Arabia; UAE.
Capital Adequacy Norms: Banks Compliance with BASEL-III Norms
by Sahil Singh Jasrotia, Hari Govind Mishra, Roop Lal Sharma
Abstract: The worldwide financial crisis of 20082009 had unfavourably affected the banking sector and impelled the Basel Committee on Banking Supervision (BCBS) on amending its existing capital adequacy guidelines in December 2010, termed as Basel-III guidelines, to reduce the chances of happening of any such crisis in the future. In this paper, we empirically analyse whether after complying capital adequacy ratio as per RBI Basel-III norms, the banks are able to take gain investors confidence into them. This paper analyses whether risk perception of CAR compliant banks has increased or decreased or stagnant in terms of change in advances and profitability for the fiscal years 2015 and 2016. The data being used for the analysis are financial reports (balance sheets and income statement) of the banks and their capital adequacy ratios for the fiscal year 20142015 and 20152016.
Keywords: capital adequacy norms; Basel-III norms; Basel Committee on Banking Services; content analysis.
Customers Operational Risk towards Electronic banking products and its Mitigation: a Covariance Based Structural Equation Modeling Approach
by Aravind M, Vinith Kumar Nair
Abstract: The e-banking operations can cause loss or damage to the customers in the form of processing errors, fraud, or via external events. The purpose of this work is to analyze the major risk factors influencing the customers in their e-banking operations. Based on the classic stimulus- response approach we have identified fifteen risk stimuli that can cause some encumbrance in e-banking operations. Based on the stimulus we have identified four major risk constructs at operational level viz Debit Card usage Risk (DCR), Internet Banking usage Risk (IBR), Mobile Banking usage Risk (MBR) and Credit Card usage Risk (CCR). We have also identified some risk mitigation strategies based on the review of literature and focus group discussions. In this work a stimulus response model was constructed by linking the operational risk in e-banking with the risk mitigation strategies. Further we used data from 742 respondents for empirically validating the proposed model. The results of covariance structural equation model (CB-SEM) revealed that the strategies identified have a positive effect on mitigating the Internet Banking Risk (IBR) only. Whereas the obtained negative coefficients between the other risk constructs and suggested strategies indicates that present approaches employed are not sufficient in extenuating mobile banking risk and card banking risk.
Keywords: E-banking; Operational Risk; Stimulus-Response model; Risk mitigation; CB-SEM.
Development of conceptual framework for Internet Banking Customer Satisfaction Index (IBCSI)
by Mugdha Y. Keskar, Neeraj Pandey, Avadhut A. Patwardhan
Abstract: Previous researchers have extensively studied the application of customer satisfaction index (CSI) models. The American customer satisfaction index (ACSI) was one of early customer satisfaction scale launched in the early 1990s. After the success of ACSI, various researchers came up with country-specific CSI. However, there are hardly any industry-specific CSI. This paper attempts to review the various CSI models and build a conceptual framework for internet banking customer satisfaction index (IBCSI). The IBCSI, a new index proposed for the banking industry, would measure CSI for internet banking customers. This study is pertinent due to the exponential growth in e-banking. The study also highlights the emerging areas of research in internet banking domain.
Keywords: customer satisfaction index; CSI; internet banking; conceptual model; customer satisfaction.
Virtual learning enriched by social capital and shared knowledge, when moderated by positive emotions
by Anjum Razzaque
Abstract: The higher education sector has reported degrading teaching-learning quality. In parallel, Middle Eastern countries strive to improve education systems and face similar global challenges. The education system transforms its teaching-learning quality via e-learning strategies, where student interact while sharing social capital of resources within a virtual environment during participating to share knowledge. Past research assessed the role of social capital on knowledge sharing behavior in virtual communities but in sectors other than the higher education. Also, past education-research made proclamations with improper evidence. Henceforth, this study assesses the role of students social capital (using social capital theory) on knowledge sharing behavior while e-learning, and the moderation of positive emotion. This deductive approachs reviewed-literature proposed five hypotheses, which when tested using multi-correlation analysis, on undergrad business students of Ahlia University, Bahrain; support all hypotheses. Also, implications to theory and practice and proposed in this article.
Keywords: Social Capital Theory; Knowledge Sharing quality; Positive Emotions; Higher education sector.
The Factors Influencing the Adoption of Internet Banking in Yemen
by Wail Alhakimi, Jameel Esmail
Abstract: The purpose of this study is to analyze the factors that has an influence over the customers intention to adopt internet banking in Yemen. A questionnaire was developed and distributed to the customers of most of active banks in Yemen. By using exploratory and quantitative methods, 384 questionnaires were distributed, and 301 were successfully retrieved. The collected data was examined using descriptive, correlation, and regression analyses. The findings reveal that while relative advantage, perceived risk, perceived security have no significant impact, technology readiness along with prior internet knowledge have significant impact on the intention of customers to adopt the internet banking in Yemen. This study implicitly provides a background for the hypotheses that were tested in order to validate a model for the purpose of accepting the internet banking services. Banks in Yemen are in dire need to invest heavily in internet banking and its IT infrastructure, expand services into remote areas, and build trust to attract more customers in order to increase the percentage of internet banking adopters. The study is highly crucial to the emerging financial institutions in Yemen, as it provides answers to the factors that affect the customers intention to adopt internet banking in Yemen.
Keywords: Internet banking; Relative advantage; Perceived risk; Perceived security; Technology readiness; Prior internet knowledge.
An Empirical Analysis of the Sustainability of Meeting the Convergence Criteria for Turkeys Accession to the European Monetary System
by Samar Akhtar, Subhadra Ganguli
Abstract: Abstract: rnThis paper compares Turkey against three other European Union countries, namely Germany, France and Italy in terms of the convergence criteria of the Maastricht Treaty and the Stability and Growth Pact for the potential acceptance of Turkey into the European Monetary System with single currency Euro. The paper uses quantitative empirical analysis using macroeconomic data for the period 1999-2016 for all the three countries to compare and analyse the conditions of convergence between them. Results show convergence of EU countries in most criteria of the Maastricht Treaty and the Growth and Stability Pact during 1995-99, prior to the creation of the European Union. During 19992005 Turkey exhibited convergence in all criteria except exchange rates, inflation rates and interest rates; during 2005-16 it lacked convergence in areas of exchange rates, inflation rates and interest rates, again demonstrating that the country was not ready for economic integration with EU. This study attempts to consider the sustainability of Turkeys accession into the single currency European Monetary System using economic and monetary criteria only. The results from this research could throw insights into the macro-economic and financial viability of the potential entry of Turkey into the single currency Euro zone from policy perspective. rn
Keywords: European Monetary Union; Turkey; Convergence Criteria; single currency euro.
Proposed mobile trade application:A new approach for sharia compliant credit card
by Mohammad ALLAYMOUN, Omer Hag Hamid
Abstract: This paper presents a proposed mobile application system that hopes to offer a Shariah-compliant credit facility. To be the ideal solution for customers seeking technical solutions to help them effectively complete their credit operations under Islamic law. The proposed scenario suggests the use of an electronic application instead of a plastic card. The electronic application implements the required contracts that are necessary to make the processes fully Shariah-compliant , the application execute a punch of contracts that approved by Sharia such as agency (Wakalah) and sales (Murabaha) , using a couple of tools also approved by Sharia such as constructive Possession, moreover there is a certain permissibility in debt particularly to debtor that there is allowance to deduct part of agreed profit this mean if a client accelerates payment of one or more installments prior to the date specified for such payment , the Islamic bank may deduct part of the profit agreed upon between the Islamic bank and the client at the time of settlement this permissibility approved by AAIOFI standard .
Keywords: Mobile Application; Credit card; Islamic banks; E-bank; Investments; Murabaha; Mobile Banking.