Factors Affecting the Rapid Growth of Islamic Banking System: A Comparative Ratio Analysis of Selected Banks of Pakistan

  • Nighat Moin Indus University, Karachi.
  • Muhammad Furqan Indus University, Karachi.
  • Zohra Muhammad Ali University of Karachi.
Keywords: Ratio Analysis, Islamic Banking, Conventional Banking, Finance to Deposit Ratio (FDR) , Advance to Deposit Ratio (ADR).

Abstract

Banking industry acts as mean of support of contemporary trade and business, stand-in as a link, to endow with a key foundation of monetary intermediation. Thus, evaluation of its competence is fundamental in framework of a well-organized and spirited financial system. There is various conduct of measuring competence of banks. Private Banks in Pakistan appeared as capable on both borders, i.e., procedural competence and allocative one, in comparison to their analogue, the public and foreign banks. As the race in banking sector is being paid strong, these banks could do with to diminish their set expenditures. This study analyzed the Return on Equity (ROE), Return on Assets (ROA) and Financing to Deposit Ratio (FDR) for Islamic Banks and Advance to Deposit Ratio (ADR) for Conventional Banks. The study comprises of three periods, Pre-Crises, During Crises and Post Crises.  After the crises period, Islamic banking system continue to rise and still got very difficult for conventional banking system to revitalize. But they start opening their Islamic Banking Window where they deal with Islamic Finances. MCB opened its MIB (Muslim Islamic Bank) and Aetbaar for Allied Bank.

 

Published
2020-07-04
How to Cite
Moin, N., Furqan, M., & Ali, Z. (2020). Factors Affecting the Rapid Growth of Islamic Banking System: A Comparative Ratio Analysis of Selected Banks of Pakistan. The Islamic Culture "As-Saqafat-Ul Islamia" الثقافة الإسلامية - Research Journal - Sheikh Zayed Islamic Centre, University of Karachi, 43(43). Retrieved from http://theislamicculture.com/index.php/tis/article/view/656