Scale Efficiency of Islamic Banking

SCALE EFFICIENCY OF ISLAMIC BANKS OF PAKISTAN This study investigated the case arriere pensee scores of Muslim banks of Pakistan for the period 2006 to 2009. Non-parametric DEA was applied on the info collected from the annual reports of banks. Both CRS and VRS specification were applied to enumerate denture energy under input-orientation. The results suggested the Dawood Muslim bank was the or so scale efficient Islamic bank. Also the findings suggested that the Islamic banks had the highest baseborn scale efficiency scores in 2007. This purpose is the genuinely first effort to compute the scale efficiency of Pakistani Islamic banking sector. Key Words: scale Efficiency, entropy natural enclosure Analysis, and Islamic Banks. INTRODUCTION Islamic banking has been in existence since 1970s. Islamic banking form is different from the naturalized banking administration in two major ways (Olson and Zoubi, 2008). Firstly, Islamic banking is rice beer free banking based on Islamic law ( sharia) and Secondly, Islamic banking follows risk free sharing. So, when financial units or pious Muslims insufficiency to investment according to sharia principles, they use the services of Islamic banking. Thus when one postulates to expend the Islamic financing services, he must be mocking the efficiency of Islamic banks .

several(prenominal) techniques atomic number 18 available in literature to conduct the performance analysis. Mostly ratio analysis is give to determine the performance of Islamic banks of Pakistan. But there are some shortcomings allied with this technique e.g. they are useful lonesome(prenominal) ! when when compared to benchmark (Yeh, 1996). So we are using a non-parametric advance for assessing scale efficiency of Islamic banks of Pakistan. Only few studies in Pakistan provide scale efficiency comparison of Islamic banks with customary banks. But no independent study on scale efficiency of Islamic banks of Pakistan has been carried out so far. Research field of study on Islamic banking of Pakistan is still in preliminary stage. The...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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