CONSUMER PREFERENCES AND REGULATIONS IN CREDIT CARD MARKETS: EVIDENCE FROM TURKEY

In this paper, we analyze the demand side of the credit card market. Using unique survey data and a discrete choice model, we uncover consumer preferences for all price and nonprice features of credit cards. Our results provide evidence for an alternative explanation for the credit card pricing puzzles. We show that consumers view credit cards as highly differentiated products with both bank-level and card-level nonprice features. When selecting their credit cards, they predominantly prioritize these nonprice features over prices. Although private banks charge higher prices for their credit card services than other banks, the majority of consumers choose them as issuers due to their bank-level and card-level nonprice features. Consumers who prioritize prices tend to choose the credit cards of participation or public banks. Widespread branch/automated teller machine networks as bank-level features and installments, bonuses/rewards/miles and the prestige of the card as card-level features are particularly effective in consumers’ decisions to choose private banks as issuers. Such strong preferences for nonprice features seem to furnish private banks with market power. Hence, we argue that underlying issuers’ market power is also this differentiated nature of credit cards, for which regulatory measures are not self-evident.

Does Credit Rating Matter on Risk Disclosure?

This research investigates the partial and simultaneous the influence of leverage, profitability, credit rating on risk disclosure. This research involved thirteen public banks on the Indonesia Stock Exchange in 2014-2019. Risk disclosure is measured by counting risk keywords in each annual report. The panel data analysis was employed to test the effect of Leverage (X1), Profitability (X2), and Credit Rating (X3) on Risk Disclosure (Y). Hypotheses testing used multiple linear regression or OLS (Ordinary Least Square). The finding indicates that Leverage and Credit Rating do not influence Risk Disclosure. Leverage, Profitability, and Credit Rating simultaneously influence Risk Disclosure.

Corporate Social Responsibility – A Case Study on Strategies of Indian Private and Public Sector Banks

Purpose: The banking industry in the service industry sector in India contributes to the economy of the country by mobilizing the deposits and providing credits to other industries, industry sectors, and individuals. As per new government policy, private banks mandatorily and public banks are voluntarily required to contribute to corporate social responsibility fund of 2% of the profit on social service activities to address a variety of societal needs. It is interesting to know how Indian banks have utilized CSR funds by means of smart decision-making. It is interesting to compare the CSR activities of some selected public and private sector banks in India, to know their smart strategies for improving the organizational business benefits. Design/Methodology: This study identifies and analyses various social responsibility programs organized by selected banking organizations of India. The data and information used are obtained from websites of chosen banks, bank literature from different websites, banks statements, and related case studies. Findings: The government has declared that companies earning a profit of 500 crores or more should establish a CSR team that should contain three or more executives and one independent administrator to develop CSR guidelines and to handle the CSR activities. Based on the comparison of CSR activities between private and public sector banks, it is found that the CSR activities offered by private sector banks focused on directly supporting their customer services and CSR activities offered by public banks are indirectly supported their brand-building activities so that these two types of banks could get benefit in terms of customer satisfaction and promotion of their services to weaker sections of the society, respectively. Originality/Value: This research paper analyzes the role played by private and public banks in the effective implementation of their corporate social responsibilities by segregating the CSR activities into inbound and outbound activities. Paper type: Research Case study.

INDIAN BANKING INDUSTRY: A NEW EVIDENCE FROM A PROFITABILITY PERSPECTIVE

While India is set to become the world’s most populous country by 2050, it is also the home to the world’s largest number of unbanked individuals. This paper aims to investigate the profitability issue with a focus on public banks. Using a new methodology based on comparisons tests and panel analysis that test unobserved heterogeneities between banks. We show that public banks are not low performers, nor can private banks be considered high performers Finally, we show that the proportion of non-performing assets (NPAs) is a real concern and requires urgent attention of government and regulators for Indian banks to serve profitability their home market. Banks that make more profits on non-interest income are not necessarily less profitable than others. Further, outcomes favour the ideas that if public banks are able to clean-up their non-performing assets as well as follow a sound prudential regulation, their profits could strongly grow. Future reforms must consider the public bank’s key role in the growth of the India’s economic outlook, especially when it comes to projects of social importance and national priority. The study is based on 105 banks with cross-sections from 2003–2016; however, India’s government has initiated reforms in the banking segment, which has led to a significant decrease in government stake and the number of banks.

Bank Competition Using Networks: A Study on an Emerging Economy

Interconnectedness among banks is a key distinguishing feature of the banking system. It helps mitigate liquidity problems but on the other hand, acts as a curse in propagating systemic risk at times of distress. Thus, as banks cannot function in isolation, this study uses the Contemporary Theory of Networks to examine banking competition in India for five distinct economic phases, emphasizing upon the Global Financial Crisis (GFC) and the ongoing COVID-19 pandemic. This paper proposes a Market Power Network Index (MPNI), which uses network parameters to measure banks’ market power. This network structure shows a formation of bank clusters that are involved in competition. Specifically, network properties, such as centroid, average path length, the distance of a node from the centroid, the total number of connections in the inter-bank market, and network density, do go on to explain banking competition. It is interesting to note that crisis periods witness a lower level of competition, with GFC bearing the least competition. The ongoing COVID-19 pandemic shows a lower trend, but it is of a higher magnitude than GFC. It was also found that big-sized, profitable, capital adequate, and public banks dominate the banking system. Notably, this study was conducted on a sample of 33 listed Indian banks from April 2008 to December 2020.

What explains the technical efficiency of banks in Tunisia? Evidence from a two-stage data envelopment analysis

In this study we examine the potential determinants of technical efficiency for the Tunisian commercial banking sector over the period of 1995–2017. First, we estimate banking technical efficiency with a radial and non-radial bootstrap data envelopment analysis. For the radial technique, we use an input-oriented approach and for non-radial we use the Range Adjusted Measure (RAM). Second, we use a double bootstrapping regression technique to estimate the influence of a set of eventual determinants on technical efficiency. Finally, based on all possible regressions, we gauge the overall effect of each determinant. Our results reveal that the input-oriented and RAM approach gave somewhat similar results. We found that the return on equity, the expense to income ratio, the loan to deposit ratio, and the growth rate are insignificant to Tunisian banking technical efficiency. In particular, banking technical efficiency increases with capitalization and inflation, whereas, it decreases with size, number of bank branches, management to staff ratio, and loan to asset ratio. In addition, we identified evidence supporting the moderate success of the last decade of reforms and a noticeable one for the post-revolution reforms in helping improve banking technical efficiency. The post-revolution reforms, largely revolving around reinforcing the rules of good governance and banking supervision, coupled with the restructuring of public banks, were found to be insufficient to raise overall banking technical efficiency despite improvement in the technical efficiency of private banks.

Financial Performance and Social Responsibility-The Case of Islamic Banks: A Theoretical and Empirical Study

This article is intended to evaluate the level of disclosure of corporate social responsibility (CSR) in Islamic banks and examine the relationship between the Return on Assets (ROA) and the Return on Equity (ROE) performance indices in relation to the disclosure of the Islamic banks’ corporate social responsibility. In reality, an empirical study was performed over a six-year period from 2009 to 2014, in which the CSR shows that Islamic banks are engaged in a great variety of social activities, both as private or public banks. In fact, empirical research has also found that there is a negative relationship between the corporate social responsibility of Islamic banks and the financial results of the ROA an ROE measures.

Pengaruh Implementasi Good Corporate Governance terhadap Kinerja Perusahaan Perbankan Umum Go Public pada Masa Krisis Ekonomi Global di Indonesia

<p class="pre" align="justify"><em>This research uses normality test, classic assumption test and multiple regression analysis method which aims to see the effect of the implementation of Good Corporate Governance (with indicators of the board of commissioners, audit committee and institutional ownership) on open public banking with indicators of Non Performance Loan (NPL), Loan to Deposit Ratio (LDR) and Capital Risk (CAR) during the global economic crisis in Indonesia. Research samples from publicly listed banking companies on the Indonesia Stock Exchange (IDX) and must have the research criteria. It is known that there are 45 banking companies that are active until the end of 2019 on the Indonesia Stock Exchange (IDX), but according to the research criteria there are only 25 banking companies with 2-year observation, year2018-2019, so the number of observation samples used is 50 samples. Based on the results of the research, it is realized that the implementation of Good Corporate Governance (GCG) has no effect on banking performance with financial performance measures, namely Non Performance Loans (NPL) and Loan to Deposit Ratio (LDR) in go public banks during the global economic crisis in Indonesia, but the results Hypothesis testing shows that the implementation of Good Corporate Governance (GCG) has a positive effect on the Capital Risk (CAR) variable in publicly traded commercial banks so that it is accepted because the implementation of Good Corporate Governance (GCG) will increase the supervision of the implementation of capital adequacy regulations set by the gover</em><em>nment.</em><em></em></p>