مقالے کی معلومات
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تلخیص
This paper investigates different liquidity management
aspects of Islamic banking industry in Pakistan. Islamic banking liabilities
(deposits) and assets models, with regard to liquidity management, have
found the significant role of following variables: (a) returns on deposits, (b)
returns on financing, (c) costs of banking operations, and (d) the Interbank
rate, here Karachi Interbank Offer Rate (KIBOR). Islamic banking liquidity
reserves model, however, recommends that Islamic banks need to consider
following variables, while developing optimum liquidity reserves: (a) total
Islamic financing, (b) returns on financing, and (c) KIBOR. Moreover,
the resilience analysis of the Islamic banking industry carried out in the
current study suggests that liquid instruments performed well historically
in mitigating liquidity run conditions. Furthermore, forecasts made on the
basis of Autoregressive Integrated Moving Average (ARIMA) models for
the current study suggest that tier-2 liquid instruments would possibly be
performing well in mitigating any future liquidity run conditions (up to
95% of deposits). However, in case of tier-1 liquid instruments, there is
a possibility of liquidity mismatches when liquidity withdrawals exceed
the limit of 55% of deposits. In conclusion, Islamic banking depositors,
besides their religious motives of supporting Islamic banks, expect from
their banks to earn profits and pay competitive returns on their deposits.
Therefore, Islamic banks need to make prudent portfolio financing so as to
pay competitive returns to their depositors.
Sheikh Rafiullah, Atiquzzafar Khan, Fazal Rabbi Mumtaz. (2018) Liquidity Management by Islamic Banks in Pakistan: An Econometric Analysis, Journal of Islamic Business and Management, Volume 8, Issue 1.
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