Bangladesh Bank Training Academy Journal

Abstract: The current study aims to measure and compare the technical, allocative and cost efficiency of Islamic and conventional commercial banks operating in Bangladesh during 2017-2022. It applies data envelopment analysis (DEA) technique to estimate efficiency of 19 commercial banks which include five Islamic banks, four state-owned banks and ten conventional private commercial banks. Islamic banks showed better efficiency performance against conventional state-owned and private commercial banks. The mean technical, allocative and cost efficiency scores were 0.990, 0.797 and 0.789 for Islamic commercial banks. In contrast, the mean technical, allocative and cost efficiency scores were 0.705, 0.536 and 0.398 for the conventional state-owned commercial banks and the scores were 0.964, 0.759 and 0.735 for conventional private commercial banks. The empirical results also show that the mean technical, allocative and cost efficiency scores of all commercial banks are 0.886, 0.698 and 0.641 respectively implying that all banks showed mean technical, allocative and cost inefficiency scores of 0.114, 0.302 and 0.359 respectively. The findings suggest that there is room for improvement of cost efficiency by enhancing both technical and allocative efficiency. To this end, bank management need to adopt measures for promoting managerial efficiency (technical efficiency) and using inputs in optimal proportion given their respective prices (allocative efficiency).

Citation: GolzareNabi, M. (2022). Measuring and comparing technical, allocative, and cost efficiency of Islamic and conventional commercial banks in Bangladesh applying data envelopment analysis (DEA). BBTA Journal: Thoughts on Banking and Finance, 9(2), 1-20.

Abstract: The main objective of this study is to analyze the case for building a proposed IIPS (Instant and Inclusive Payment System) in Bangladesh. Hence, a diagnostic review of existing payment systems was done also to assess whether their performance was enough to meet the current and future demands of the economy; or whether implementing the proposed IIPS is required for balancing the progress of the economic development throughout the country. The data have been collected from both primary sources i.e. personal interviews and secondary sources. The experience of India, Thailand and the UK is used to justify the need for building an IIPS in the context of Bangladesh. This study highlights some concerns about the services, costs, and interoperability levels among existing DFS providers. I also consider the regulation and operation issues for making the financial inclusion meaningful. Finally, by taking cognizance of the features and recommendations mentioned below for establishing an IIPS in Bangladesh, I am humbly requesting the Government and Bangladesh Bank to consider the issue of building an IIPS as a part of implementing the SDGs by 2030.

Citation: Hussain, M. Z. (2022). A case for building an Instant and Inclusive Payment System (IIPS) to support the progress of the Bangladesh economy. BBTA Journal: Thoughts on Banking and Finance, 9(2), 21-40.

Abstract: This study purposes to analyze the effects of the recent oil price hike (fuel prices oil) on the inflation rate in Bangladesh. The estimation process of this study utilizes the monthly secondary data from July 2013 to September 2022 available from different sources (like; Bangladesh Petroleum Corporation, World Bank) by using the VECM approach. The rate of inflation is the dependent variable in the estimation process, domestic and global oil prices are our independent variables, and the broad money supply is included as a control variable. A simple Correlation Matrix is also done to observe the connection among the variables. The result of this study indicates a statistically significant long-run relationship among domestic oil prices, broad money supply, and the inflation rate of Bangladesh, but world oil prices show statistically insignificant results. Besides, this is consistent with theory, and the short-run adjustment coefficient has a statistically significant with negative sign, implying that long-run equilibrium is stable in the presence of any short-run shocks in oil prices. In the short run, the inflation rate is extremely high when oil prices hike, and as time goes on, the inflation rate will be adjusted in the long run. This finding is informative to policymakers or experts for formulating monetary and fiscal policies as well as providing important insights for the handling of inflation.

Citation: Bindu, M. R. A., & Hossain, M. S. (2022). Identifying the spillover effects of domestic oil price hike in the inflation of Bangladesh. BBTA Journal: Thoughts on Banking and Finance, 9(2), 41-59.

Abstract: In tandem with global rapid expansion of Islamic finance, Bangladesh has experienced phenomenal growth in Islamic banking in the backdrop of strong public demand and support for the system. The Islamic banks play key role in promoting economic growth in Bangladesh by mobilizing deposits, collecting foreign remittances and financing major economic sectors such as agriculture, industries and trade. The current paper seeks to find out the magnitude of contribution of Islamic bank financing on economic growth in Bangladesh during 1991-2020. To this end, the paper would apply Vector Error Correction Model (VECM) based on secondary time series data. It is found that Islamic finance including conventional bank finance, FDI and government expenditure affect GDP positively in the long run. However, GDP is negatively related to the growth of Islamic bank financing in the short run.

Citation: Nabi, M. G., Uddin, M. J., & Nabi, R. (2022). Does Islamic bank financing spur economic growth in Bangladesh? An application of VEC model. BBTA Journal: Thoughts on Banking and Finance, 9(2), 60-76.

Abstract: In Bangladesh, nearly three million individuals are disabled. We cannot guarantee equal treatment for all if disabled people are excluded from our financial sector. Access to financial services is the primary requirement for disabled individuals' financial inclusion. The study aims to determine thecurrent status of disabled individuals' financial access opportunities in Bangladesh. The study also examines the utilization of financial services by disabled individuals in Bangladesh. The study also highlighted the difficulties a disabled individual faces when obtaining financial services. The study was conducted using a mixed methodology. In this study, both quantitative and qualitative methods have been employed. The study reveals that the banking system represents numerous challenges for people with disabilities in Bangladesh due to the fact that they lack banking system knowledge. Consequently, financial access, one of the most reliable indicators of how much a person benefits from the banking system, is extremely low among physically challenged individuals in Bangladesh.

Citation: Imtiaz, M. M., & Shaulin, N. (2022). A situation analysis of access to financial services by disabled persons in Bangladesh. BBTA Journal: Thoughts on Banking and Finance, 9(2), 77–93.