The Impact of Liquidity Risk Management on Selected Islamic Banks in Pakistan

Abstract

The purpose of this particular study is to determine if there exists any liquidity risk in Islamic banks of Pakistan and its effect on the resilience of the industry in the country. Participants of this study were employees of Islamic banks. Primary data was collected from three major cities of the country. The study discovers the situation of liquidity risk management. Further, the attitude of Central bank and Islamic banks towards liquidity risk management policies. Regression models were applied in order to analyse the impact of liquidity risk management on Islamic banks. The findings show the effect of variable like rational depositor and training on the liquidity risk. Central bank is providing Islamic banks with adequate rules and regulations. Islamic banks practices to control liquidity according to rules and also the requirement of the depositors. The results of this study offer a useful insight for Islamic banks worldwide.