The role of central bank regulations in enhancing Islamic bank performance in Egypt
Tammam, Aliaa Abdallah
Cardiff Metropolitan University
MetadataShow full item record
One of the key success elements of economic development is a well-established, banking system. This sector is often considered for mobilising savings as credit or investment tools. In addition, the banking system plays a vital role in increasing investments to serve the financial resources essential for developmental needs (Etab, 2016). However, continual financial crises have resulted in troubles in many conventional banks all over the world. By contrast, the Islamic banks (IBs) were safeguarded against these crises (Johnes et al., 2014). In fact, Islamic banking broadened its requests to more investors other than just traditional Muslims ones. Recently, more than 300 Islamic financial institutions were established in 70 countries across the world (Johnes et al., 2014). This study explored the key problems and challenges in the development of Islamic banking in Egypt, considering the extant rules and regulations set by the Central Bank of Egypt (CBE): the legal reserve policy, bank examination system, credit ceiling, liquidity limit, capital adequacy policy, discount rate, financial policy, ban on dealing in moveable and immoveable assets, and open market operations. Through the development of a regression model, the aspects of the regulations with the most impact on Islamic banking performance were identified, and proposals for amendments were developed as necessary. These proposals were discussed with experts from Islamic banking sectors as well as the CBE. This study will be of great importance for banks’ managers, regulators, depositors, investors and shareholders. It reflects the real condition of the Islamic banking system in Egypt, providing a complete picture of IB’s place in the Egyptian banking sector. Further, it provides a full analysis of how the current regulations affect the achievement of Islamic banks in comparison with the achievement of conventional banks in Egypt. Data was gathered by interviewing 30 bank employees, chosen via non-probabilistic convenient sampling techniques, to help in developing the research hypotheses. In addition, secondary data on banking performance using CAMEL was gathered from the Fitch solution database. Hypotheses were answered by analysing the data collected from 347 questionnaires; the data was distributed using regression and correlation analyses to test the relationships and the relative importance of the variables. Finally, the researcher developed a set of proposals to amend the central bank regulations and discussed them with an expert panel. According to the relative importance and the regression models, it was concluded that the performance of IBs was low due to the absence of the following factors: the current legal reserve policy, current bank examination system and credit ceiling.
PhD Thesis- School of Management
Showing items related by title, author, subject and abstract.
Human capital development in the UAE Islamic banking sector: addressing the challenges of Emiratisation Qambar, Amal Sabah Obaid (Cardiff Metropolitan University, 2015)The development of human capital often faces challenges due to skills gaps in the labour market and this is exacerbated by the distinctive differences between the skills gained through education and those required by the ...
A comparative study of risk management practices between Islamic and conventional banks in Pakistan Rehman, Asma Abdul (Cardiff Metropolitan University, 2016)Purpose: The purpose of this research study is to investigate the extent to which banks are using risk management practices in dealing with various risks and to compare risk management practices between Islamic and ...
A comparative study of Islamic and conventional banks’ risk management practices: empirical evidence from Pakistan Rehman, Asma Abdul; Benamraoui, Abdelhafid; Dad, Aasim Munir (Wiley, 2017-06-20)While conventional bank risk management practices are well documented in the literature, there is limited research devoted at comparing the risk management practices of Islamic and conventional banks and how the recent ...