INTERNATIONAL REGULATIONS AND NON-PERFORMING ASSETS: MODERATING ROLE OF MARKET CONENTRATIONS

Abstract

Banks in Pakistan are vital and essential for economic stability, growth, and financial inclusion. However, efficient credit management significantly impacts the overall success of banks. Considering the fact, the central banks have taken a number of initiatives in this regard and implement different international regulations in Pakistan. Hence, the basic aim of this research is to find the relationship between the international regulations and nonperforming assets with market concentrations as a moderator variable. This study has obtained data from the annual reports of selected banks. The data have been taken from SBP’s website from the period of 2007 to 2016 with 235 observations are considered. The current study results show that stricter or more comprehensive international regulations may lead to a reduction in non-performing loans (NPLs) in Pakistan’s banking sector. However, the moderating role of market concentration particularly in a financial landscape dominated by a few major banks remains ambiguous. The current study intends to provide deeper insights for important stakeholders such as bank managers, policymakers and regulatory authorities to formulate more effective strategies for operational efficiency as well as financial performance of Pakistan Banking Sector.