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Risk management practices in Islamic banks of Pakistan

Author

Listed:
  • Sania Khalid
  • Shehla Amjad

Abstract

Purpose - The purpose of this paper is to evaluate the degree to which Islamic banks in Pakistan use risk management practices (RMPs) and techniques in dealing with different types of risk. Design/methodology/approach - A standardized questionnaire is used which covers six aspects: understanding risk and risk management (URM), risk assessment and analysis (RAA), risk identification (RI), risk monitoring (RM), credit risk analysis (CRA) and RMPs. Findings - This study found that the Islamic banks are somewhat reasonably efficient in managing risk where URM, RM and CRM are the most influencing variables in RMPs. Research limitations/implications - The paper's findings are limited to the RMPs of Islamic banks in Pakistan. Originality/value - This paper explores the RMPs of the Islamic banks in Pakistan. The results can be used as a valuable feedback for improvement of RMPs in the Islamic banks in Pakistan and will be of value to those people who are interested in the Islamic banking system.

Suggested Citation

  • Sania Khalid & Shehla Amjad, 2012. "Risk management practices in Islamic banks of Pakistan," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 13(2), pages 148-159, February.
  • Handle: RePEc:eme:jrfpps:15265941211203198
    DOI: 10.1108/15265941211203198
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    Citations

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    Cited by:

    1. Mirza, Nawazish & Afzal, Ayesha & Umar, Muhammad & Skare, Marinko, 2023. "The impact of green lending on banking performance: Evidence from SME credit portfolios in the BRIC," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 843-850.
    2. Hafiz Waqas Kamran & Abdelnaser Omran & Shamsul Bahrain Mohamed-Arshad, 2019. "Risk Management, Capital Adequacy and Audit Quality for Financial Stability: Assessment from Commercial Banks of Pakistan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(6), pages 654-664.
    3. Najat Shakir Mahmood & Elsadig Musa Ahmed, 2023. "Mediating effect of risk management practices in Iraqi private banks financial performance," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(2), pages 358-377, June.
    4. Ahmad Raza Bilal & Noraini Bt. Abu Talib & Mohd Noor Azli Ali Khan, 2013. "Remodeling of risk management in banking: evidence from the sub-continent and gulf," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 14(5), pages 468-489, November.

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