Quarterly Studies in Banking Management and Islamic Banking

Abstract This study, using spatial econometrics, investigated the effect of bank efficiency and monetary indiscipline on the economic convergence of provinces in the period of 1389 to 1398. The estimation results of the models revealed that the ratio of facilities to bank deposits, as an indicator of banking efficiency and monetary indiscipline, has a negative and significant effect on economic convergence in the provinces investigated. Therefore, the banking system was not able to play an influential role in economic convergence. The absolute speed of convergence was shown to be 0.048; in the conditional models, with the values of 0.269 and 0.254, the speed of convergence of the provinces was higher. However, with the introduction of banking variables, the speed of convergence decreased. In other words, on a yearly basis, 4.8% in the absolute convergence mode and 26.9% and 25.4% in the conditional convergence mode, the economic gap of the provinces is fixed to a stable state. Moreover, real capital stock and taxes have a positive and significant effect, whereas human capital and misery index have a negative and significant effect on economic convergence. Examining the effects of spillovers in 1398 indicated that the spillover effect of banking efficiency on neighboring provinces was positive. Also, with the increase in the distance between the provinces, the spillover effect decreased. In fact, the effects of spillover on neighboring provinces are more than those that are further away.

Abstract Today, banks are looking for performance improvement methods to surpass their competitors to increase market share and profitability. Since one of the most important issues and concerns for the banks are profits and returns, they use a variety of methods to attract more customers. Base on this reason, performance evaluation of banks is very crucial and important not only for their investors and depositors, also for their managers. This study examines the factors affecting the profitability of Iranian private banks in the period of 2006 to 2014 and focuses on the financial factors to increase the efficiency by the bank managers. The study is a correlational research and was conducted using analysis of historical data. In this study, according to 3 independent variables (size of the bank, operating efficiency, asset management), 6 hypotheses were formulated. The results show that there exists a significant relationship between the independent variables and profitability criteria (net interest income and return on assets of the banks). To test the research hypotheses, multivariate linear regression and panel data analysis were utilized.

Abstract Nowadays, bank as the most important element of the financial market plays a significant role in the countries' economy especially Iran, which relies on the banking system. So the study of banking system and factors affecting its performance are very important. One of these factors is the exchange rate, a key variable in every economy. In recent years, the exchange rate in the Iranian economy has encountered many fluctuations. Exchange rate fluctuations in developing countries like Iran, due to the lack of developed financial markets, expose these countries to financial crises. The exchange rate fluctuations and the volatility of financial markets can have an unfavorable impression on the stability of banks. This is due to the lack of the ability in eliminating the impact of exchange rate fluctuations even by using the risk management techniques; and on the other hand, developing countries do not have the essential tools to deal with these fluctuations. Thus, these countries are more vulnerable, and more likely exposed to financial crisis. Therefore, this study investigates the impact of exchange rate fluctuations on the performance of Iranian banking system using Generalized Method of Moments (GMM) in dynamic panel data context during 2009-2014. To evaluate the banking performance, two criteria of revenue and asset quality have been considered and for evaluating these criteria accordingly, the ratio of return on assets as well as the ratio of outstanding claims to total paid facilities has been applied.
The results of this study show that the exchange rate volatility has negative significant impact on the return on assets of banks. The exchange rate fluctuations impose different types of risks on banking system such as transaction risk, conversion risk, credit risk, interest rate risk and due to these risks, the profitability of banks decrease. Similarity, exchange rate fluctuations are an effective and positive factor in clarifying the ratio of outstanding claims to the total payable facilities of banks because they lead to create credit risk, and as a result increase outstanding claims of banks.

Abstract In this study, the frameworks of Shariah supervision and specifically, Shariah compliance, have been introduced and examined, and its purpose is to provide a framework that can be used to create a perspective for the culture of Shariah compliance risk in Iran's banking system and at the level of organizational procedures. For this purpose, the structures of Shariah supervision in the countries with the Islamic banking window have been examined from the institutional and instrumental aspects, then relying on numerous international and domestic studies, it has been tried to select the best experience related to the implementation of Shariah Supervision. Until now, comprehensive scientific and executive documentation has not been compiled regarding this issue in Iran as a country that faces challenges in Islamic banking in the form of the law of Usury-Free Banking Operation. Therefore, by using the Future Study method and by choosing the Visioning approach, it has been tried to define and explain a suitable framework to be used to develop a desirable vision for the country. For this purpose, Shariah supervision and its implementation system in Malaysia, where is considered to be leading in the implementation of Islamic banking, it has been examined as a perspective, and by examining the legal and regulatory frameworks, institutional and instrumental capacities, studies and achievements of the Islamic banking system and ongoing and future programs approved by the supervisory body in this country, draws a structure in accordance with the culture of Shariah compliance risk in Malaysia with an emphasis on organizational procedures and it has been introduced as a framework for exploiting the culture of Shariah compliance risk in Iran.

Abstract Using a descriptive-analytical method, this study proposes a new method to make profit from forfeited properties that can be employed by the banking system to provide cheap financing. The main hypothesis of this study contends that Murabaha bonds for providing liquidity along with their derived instruments such as legitimate put and call options, with a controlled return risk, can help banks with the frozen profit of forfeited properties and provide cheap financial resources, compared to the current state of the money market. Banks can use this method to sell such assets based on the market rate (calculated through discovering the prices in commodities exchange) and using Murabaha bonds, while postponing the delivery of properties up to two years. This will provide them with the much needed liquidity while taking advantage of the rent until the deadline for delivery, before which, the banks will be entitled to rent out the property according to the contract. At the delivery time, the property will either be handed over to the intermediate company (SPV) to be sold in the market and the sums divided among bond holders; or the manner of final settlement will be determined by granting the rights for call option and put option respectively to the bank and the intermediate company on behalf of the bond holders. Considering that there is no obligation in call and put options as a second contract, Murabaha contract will not lead to Ba'i al-'Ayn (sales in cash of a property just bought on installment).

Abstract Asset and liability management includes a set of specialized tools and techniques to create value for shareholders and control risk. The banking system is the heart of every economic system and its performance is affected by many factors such as liquidity risk. Some of the factors involved in liquidity risk include non-performing loans, capital ratios, and bank size. In this research, we try to examine the relationship between the factors affecting liquidity risk and the indicators of the banking system affecting resource and cost management (equity ratio, return on assets and credit risk). In addition, we have evaluated the impact of macroeconomic variables on bank liquidity risk. Using an econometric model with generalized method of moment (GMM) as an estimation approach, we conclude that there are relationship between these variables (independent variables) and liquidity risk.

Abstract Today, due to the importance of the role of banks in the dynamics of the economic cycle of countries, correct and efficient validation has led to proper and efficient accreditation of the requirements and priorities of banks. In fact, in this way, a proper knowledge and evaluation of the customer's financial behavior can be achieved. Therefore, the main purpose of this study is to determine the credit indicators of customers and rank them by the heads of Sepah Bank branches in Tehran's second region. Validation indicators obtained from the literature and documents that were reviewed and evaluated by a panel of experts (including 10 banking experts) and the results are in the form of a questionnaire. The obtained questionnaire was distributed among 102 branch managers in the form of main indicators and sub-indicators and 95 completed questionnaires were collected and analyzed based on AHP technique of indicators and sub-indicators which are divided into official and unofficial categories are divided, weighted and prioritized (1less important-10more important). The results showed that the first and most important indicator of collateral is the official index. But another result of the research is that among the first 5 indicators, there are two unofficial indicators (unit beneficiary and customer capacity), which shows the importance of unofficial indicators. One of the limitations of this research is the limited possibility of collecting data from managers. Future researchers can achieve more and more reliable indicators by doing more research in other areas.