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Book part
Publication date: 21 August 2019

Amy Yueh-Fang Ho, Hsin-Yu Liang and Tumenjargal Tumurbaatar

This is the first study to investigate the impact of corporate social responsibility (CSR) on corporate financial performance (CFP) in Mongolian banks. We hand-collect data to…

Abstract

This is the first study to investigate the impact of corporate social responsibility (CSR) on corporate financial performance (CFP) in Mongolian banks. We hand-collect data to construct CSR disclosure index from 65 annual reports of 12 banks in Mongolia from 2003 to 2012. The results indicate that banks with larger size or Chief Executive Officer duality exhibit higher CSR performance. Moreover, banks with higher CSR performance tend to have higher net interest margin and lower non-performing loan. Furthermore, the CSR–CFP relationship varies before and after the financial crisis. The findings provide meaningful insight to the foreign investors regarding the effect of CSR on the profitability and credit risk in Mongolian banking sector.

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Advances in Pacific Basin Business, Economics and Finance
Type: Book
ISBN: 978-1-78973-285-6

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Book part
Publication date: 1 March 2021

Tria Ratnasari, Arni Surwanti and Firman Pribadi

There is a global concern over climate change issues. The banking sector is expected to join the initiatives in solving environmental issues, even though banking sectors have no…

Abstract

There is a global concern over climate change issues. The banking sector is expected to join the initiatives in solving environmental issues, even though banking sectors have no direct contribution to environmental damage. Banking commitment to environmental issues is required. The banking sector should have a responsibility for monitoring and managing the impacts of the ecological effects as the result of their business activities. The advantages of green banking implementation are that bank can avoid the use of paper by utilizing online transaction for their daily operation such as internet banking, SMS banking, and ATM. This will bring in the paperless operation into the banks, which in turn will reduce the logging of the forest. Banks also can develop an environmentally friendly lending policy for their business activities. This research aims to determine the impact of green banking daily operation, green banking policy (GBP), capital adequacy, non-performing loan (NPL), bank efficiency, and bank liquidity on bank profitability. The sample of this research is the Indonesian banking sector during the period 2012–2016. The results showed that green banking daily operation, capital adequacy, and bank liquidity have a positive effect on bank profitability. GBP and bank efficiency negatively affect bank profitability, while the NPL did not have a significant impact on banks’ profitability.

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Recent Developments in Asian Economics International Symposia in Economic Theory and Econometrics
Type: Book
ISBN: 978-1-83867-359-8

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Book part
Publication date: 23 May 2023

Ramesh Chandra Das

The values and trends of the credit–deposit (C-D) ratio in countries and the states within them depend on several factors. Two such factors that the present study considers are…

Abstract

The values and trends of the credit–deposit (C-D) ratio in countries and the states within them depend on several factors. Two such factors that the present study considers are the banks’ loanable funds locked under the heads of non-performing assets (NPA) and governments’ securities investments. Increases in the amounts of NPA and securities investments usually lead to a decrease in the allocations of bank credit to real investment purposes, such as industrial, service and agricultural activities and vice versa. On this background, this chapter examines the trends in bank credit in relation to the NPA and securities investments in the states of India and tries to find out the real cause of concern on the falling trends in the C-D ratio in the post-banking reform phase. We may now summarize that the falling C-D ratio or the rising quantity of flight of credit to the real sectors is closely associated with the banks’ investment of extra amount on securities over their statutory limits. This study finds that the NPA ratio at all-India levels is gradually declining while the investments on securities are increasing during the post-reform period. Such a craze behind this investment has an inevitable effect on the magnitude of credit delivery to the commodity-producing sectors. This means that the NPA threat is not a real threat to explain the downward trend of C-D ratio but the magnitude of security investments in both the central and state governments is a real threat and the downward trend of the C-D ratio is the result of this fact. Even though banks are safe in terms of their returns, the scenarios are not good for the rest of the economy as it creels their sustainability.

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Growth and Developmental Aspects of Credit Allocation: An inquiry for Leading Countries and the Indian States
Type: Book
ISBN: 978-1-80382-612-7

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Open Access
Book part
Publication date: 4 May 2018

Damanhur, Wahyuddin Albra, Ghazali Syamni and Muhammad Habibie

Purpose – The aim of this study is to analyze the effects of macro- and micro-economic variables on the ratio of troubled financing (Non-Performing Financing, NPF)…

Abstract

Purpose – The aim of this study is to analyze the effects of macro- and micro-economic variables on the ratio of troubled financing (Non-Performing Financing, NPF).

Design/Methodology/Approach – The method used in this research is the data panel fixed effect with 13 banks and 4 periods of data report (semi-annual report 2014–2015).

Findings – The regression result achieved that variable inflation significantly influences the ratio of NPF. Variable Gross Domestic Product and assets total significantly influence the ratio of NPF too. While the SBI sharia’s variable and Financing to Deposit Ratio did not significantly affect NPF in Syariah’s Unit of Aceh Bank Pembangunan Daerah (BPD) in Indonesia.

Research Limitations/Implications – This study uses panel data which are a combination of time series data and cross-section.

Practical Implications – The policymakers can design a macro-policy carefully and better fiscal policies.

Originality/Value – This research was conducted on the Syariah’s Unit of BPD in Indonesia during the period 2014–2015 and it has not been done before.

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Proceedings of MICoMS 2017
Type: Book
ISBN:

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Book part
Publication date: 1 November 2008

Olivier Maisondieu-Laforge, Yong H. Kim and Young S. Kim

When corporate governance is effective, new managerial contracts should maximize shareholder wealth. The Omnibus Budget Reconciliation Act (OBRA) of 1993 provides a natural…

Abstract

When corporate governance is effective, new managerial contracts should maximize shareholder wealth. The Omnibus Budget Reconciliation Act (OBRA) of 1993 provides a natural environment to examine the effectiveness of corporate governance. We find that firms affected by OBRAs $1 million cap on non-performance-based compensation experience abnormally high returns around the board meeting and proxy dates when contracts are voted on. These findings are consistent with effective corporate governance and efficient contracting and contrary to expropriation theory. Firms not affected by OBRA do not have a positive stock price reaction to new contracts and increase both cash and bonus compensation.

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Institutional Approach to Global Corporate Governance: Business Systems and Beyond
Type: Book
ISBN: 978-1-84855-320-0

Book part
Publication date: 23 May 2023

Ramesh Chandra Das

Recalling that the introductory chapter (Chapter 1) wanted to carry out similar types of analysis for the major states in India. Thus, the present chapter tries to examine the…

Abstract

Recalling that the introductory chapter (Chapter 1) wanted to carry out similar types of analysis for the major states in India. Thus, the present chapter tries to examine the trends of a bank branch, deposit, credit, the credit–deposit ratio, sectoral shares of credit, magnitudes of banking transactions, credit concentration, etc., for the selected 15 states and Delhi as the only union territory for the period 1972–2019. The study period covers the pre-reform period from 1972 to 1992 and the post-reform period 1993–2019. The observations show that the branch, deposit and credit did not grow significantly during the post-reform period. As a result, the credit–deposit ratio did not increase significantly during the reform period. But, the magnitude of banking transactions increased in most of the states during the reform period. Regarding the sector-wise share of credit, AP, Maharashtra, UP and TN are the leading states in agricultural credit, WB, Gujarat and Maharashtra are in industrial credit and Kerala, Assam and Delhi are in the service sector. On the other hand, the study finds rising magnitudes credit concentrations of the states during the post-reform period in contrast to the declining concentration in the pre-reform period. Maharashtra is the state which holds around 25 per cent of all states’ credit throughout the entire period of 1972–2019. Hence, there are the notions of rising disparity and inequality in credit as well as incomes of the states and all India levels.

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Growth and Developmental Aspects of Credit Allocation: An inquiry for Leading Countries and the Indian States
Type: Book
ISBN: 978-1-80382-612-7

Keywords

Book part
Publication date: 19 July 2023

Mainak Bhattacharjee, Amrita Chakraborty and Dipti Ghosh

The aspect of economic contrast seen in developing countries shoots primarily from the structure of loan allocation to the micro, small and medium enterprises (MSME) sector, which…

Abstract

The aspect of economic contrast seen in developing countries shoots primarily from the structure of loan allocation to the micro, small and medium enterprises (MSME) sector, which is essential for job creation and understanding the role of microfinance institutions (MFIs) in meeting the credit demands of the vulnerable but vital sector of less developed economies. The study demonstrates the impact of MSME protection in terms of both fixed and adjustable factor coefficient settings, creating a model of a small open economy with three sectors: a skill-intensive export sector; a capital-intensive import competing sector; and a labour-intensive import competing and intermediate products producing sector. It analyzes the types of protection that aid in the expansion of credit and the alleviation of capital constraints, which further highlights the insufficiencies of tariff protection for the organized sector and simple credit guarantee policies to provide adequate credit flow and thus continued MSME growth. Finally, it considers the importance of priority sector lending policies in ensuring adequate credit distribution to this sector. The results show that protection helps in enhancing flow of credit and thereby works to relax the capital constraint. However, the tariff protection for organized sector may positively or negatively affect the non-traded unorganized sector.

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Inclusive Developments Through Socio-economic Indicators: New Theoretical and Empirical Insights
Type: Book
ISBN: 978-1-80455-554-5

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Abstract

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Financial Derivatives: A Blessing or a Curse?
Type: Book
ISBN: 978-1-78973-245-0

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