Islamic Banks

Efficiency and its Determinants in Pakistan

  • Azeem Sardar MSc (Hons.) Development Economics, University of Agriculture, Faisalabad, Pakistan.
  • Muhammad Masood Azeem Lecturer, Department of Development Economics, University of Agriculture, Faisalabad, Pakistan.
  • Tanveer Ahmed Associate Professor, Department of Economics, Forman Christian College (A Chartered University), Lahore, Pakistan.
  • Sania Zafar MSc (Hons.) Development Economics, Department of Development Economics, University of Agriculture, Faisalabad, Pakistan.
  • Sania Zafar MSc (Hons.) Development Economics, Department of Development Economics, University of Agriculture, Faisalabad, Pakistan.
DOI: https://doi.org/10.52541/isiri.v50i3-4.3625
Keywords: Islamic Banks, efficiency, Pakistan

Abstract

This study was conducted to find out the efficiency of Islamic banking in Pakistan.There are 18 Islamic banks currently working in Pakistan. It includes the Islamic bank windows of conventional banks, out of these there are five pure Islamic banks. However, the data of 15 Islamic banks were available which were collected for the period 2008 to 2010. Non-Parametric approach i.e. Data Envelopment Analysis (DEA) was applied to estimate the scale, income and technical efficiency of Islamic banks. Factors affecting these efficiencies were determined by applying Tobit model. The major findings of the study were thatscale efficiency of Islamic banks was higher as compared to the technical and income efficiency.Moreover, Islamic banks efficiency was improving with thepassageoftime. The study also found that pure Islamic banks were more efficient as compared Islamic banks branches operated by conventional banks. This study suggests that Islamic banks should increase total assets and profit because these variables have positive impacts on efficiency, while liabilities showed negative impact.

References

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Published
2011-10-14
How to Cite
Sardar, A., Azeem, M. M., Ahmed, T., Zafar, S., & Zafar, S. (2011). Islamic Banks: Efficiency and its Determinants in Pakistan. Islamic Studies, 50(3-4), 423–434. https://doi.org/10.52541/isiri.v50i3-4.3625
Issue
Vol. 50 No. 3-4 (2011): Islamic Studies
Section
Articles

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