ARIMA Forecasting of Inflation in the Bangladesh Economy

-- Kanchan Datta

ARIMA method is an extrapolation method for forecasting, and like any other such methods, it requires only the historical time series data for the variable under forecasting. ARIMA models are a-theoretical, implying that their construction and use are not based on any underlying theoretical model of the behavior of a variable. However, it does not require the investigator to choose the initial values of any variable and values of various parameters a priori. In this paper, an attempt has been made for estimating an ARIMA model for forecasting the inflation in Bangladesh, which is one of the important macroeconomic variables for determining monetary and fiscal policies of the government of Bangladesh. The time plots of actual values and the forecasted values are more or less coincided; hence it may be claimed that ARIMA (4, 12, 2, 0) model fits the inflation data of Bangladesh satisfactorily.

© 2011 IUP. All Rights Reserved.

A Monetary Policy Rule: The AMCI for the Philippines Using UECM and Bounds Test

-- Wai-Ching Poon

This paper constructs the Augmented Monetary Conditions Index (AMCI) from 1982:1 to 2004:4 using Unrestricted Error Correction Model (UECM) and bounds test approach for the Philippines data. The results reveal evidence of cointegration between the real Gross Domestic Product (GDP) and its determinants, namely, short-term interest rate, exchange rate, and claims on private sector that take into account three key transmission mechanism channels in the conduct of monetary policy: interest rate, exchange rate, and credit channels. The monetary condition during the study period is reflected in the Bangko Sentral ng Pilipinas’s reaction to the prevailing economic situation, and that the AMCI tracks the inverse movements of the real GDP growth reasonably well, especially after 1990s. The paper also sheds possible light on policy implications.

© 2011 IUP. All Rights Reserved.

Asset Liability Management for Banks

-- Rossano Giandomenico

The model, by using a contingent claim approach, determines the fair value of the banks’ liabilities accounting for the protection and the surrender possibility. Furthermore, it determines the interest rate risk in combination with the stochastic optimization to obtain the implications for immunization.

© 2011 IUP. All Rights Reserved.

Employee Empowerment, Service Quality and Customer Satisfaction in Pakistani Banks

-- Muhammad Mudassar Abbasi, M Mushtaq Khan and Kashif Rashid

The paper focuses on determining the impact of employee empowerment on service quality and customer satisfaction in the banking sector of Pakistan. The data was collected from a random sample of middle and lower management staff and the customers of the banks through questionnaires. Statistical techniques such as factor analysis and correlation analysis were employed for data analysis. The study suggests a positive relationship between employee empowerment, service quality and customer satisfaction. This implies that employee empowerment results in higher level of service quality and customer satisfaction in Pakistani banks.

© 2011 IUP. All Rights Reserved.

Bankers’ Perspectives on E-Banking and Its Challenges: Evidence from North India

-- Himani Sharma

As with any new technology, e-banking too presents certain problems for banks. This paper attempts to highlight the difficulties encountered by bankers in using e-banking services. The survey data used in this research was collected through a questionnaire administered to 192 bankers in northern India. The study brings out two significant difficulties in the use of e-banking, viz., heightened stress and technical bottlenecks. To address these concerns, banks must put in place concrete development plans and a system of controls and security that boost competitiveness and ensure further progress. The paper presents the managerial implications of the results, along with suggestions for future research.

© 2011 IUP. All Rights Reserved.

Factors Influencing Internet Banking: An Empirical Investigation

-- Surinder Sharma and Ramandeep Singh

Internet is significant for redefining and reshaping the various concepts in all spheres of life. To acquire ease, swiftness and downsizing, have a forceful edge over the competitors, homogenize qualitative services, swell market share, and on the whole, to get better eminence, Internet has become an appropriate pedestal for banking sector as well. The present study is an endeavor to explore the factors influencing Internet banking. A sample of 250 Internet banking customers was examined for the said purpose. The factor analysis has identified seven factors influencing Internet banking—lack of security and confidentiality, inadequate infrastructure and connectivity, limited e-skills, no restoration and personal touch, uncertainty about the completion of transactions, lack of evidence and faith, and inadequate regulatory mechanism—which collectively account for 83.51% of the total variance. The findings of the present study may be helpful to the banking regulatory authorities, customers and the researchers in the area for the qualitative expansion of Internet banking in India.

© 2011 IUP. All Rights Reserved.