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The Impact of Economic Condition on Banking Sector

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Added on  2020-06-04

The Impact of Economic Condition on Banking Sector

   Added on 2020-06-04

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RESEARCH METHODS
The Impact of Economic Condition on Banking Sector_1
Table of ContentsRESEARCH TITLE.........................................................................................................................41) INTRODUCTION.......................................................................................................................4(1.0) Background....................................................................................................................4(1.1) Problem statement..........................................................................................................5Study Gap...............................................................................................................................6(1.2) Research objectives........................................................................................................6(1.3) Significance of Research...............................................................................................7Rationale of the research........................................................................................................7TASK 2 (LITERATURE REVIEW)...............................................................................................8To determine the significance of economic value in the banking sector..............................8To ascertain the impact of economic condition on banking sector........................................8To identify the factor that might affect the working of finance and banking sector..............9To assess the factors affecting working of finance and banking sector...............................10Ascertaining the relationship between economic condition and growth..............................11Influence of inflation and recession on financial and banking sector of Malaysia..............12Different techniques to measure financial and economic condition of the country.............13To evaluate relationship between the economic condition and growth of Malayan bank...14TASK 3 (RESEARCH METHODOLOGY).................................................................................143.1 Research framework.......................................................................................................143.2 Research Hypothesis......................................................................................................14RESEARCH METHODS..............................................................................................................153.3 Research design..............................................................................................................15(3.3.1) Research philosophy.................................................................................................15(3.3.2) Research Approach...................................................................................................17(3.3.3) Research Strategy.....................................................................................................18(3.3.4) Research choice........................................................................................................203.3.5 Type of investigation...................................................................................................20(3.3.6) Time Horizons..........................................................................................................21(3.3.7) Data collection..........................................................................................................21(3.3.7) Data analysis techniques...........................................................................................21
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3.4 Research Ethics..............................................................................................................223.5 Research plan..................................................................................................................22TASK 4..........................................................................................................................................224.1 Introduction....................................................................................................................224.2 Descriptive Statistics......................................................................................................234.3 Response rate..................................................................................................................244.4 Descriptive Analysis.......................................................................................................274.5 Reliability Analysis........................................................................................................284.6 Correlation Analysis.......................................................................................................284.8 Discussion and findings..................................................................................................334.9 Conclusion......................................................................................................................34TASK 5..........................................................................................................................................345.1 Introduction....................................................................................................................345.2 Managerial Implications.................................................................................................345.3 Limitations of the research.............................................................................................345.4 Suggestions for future research......................................................................................355.5 Correlation analysis........................................................................................................35REFERENCE.................................................................................................................................36APPENDIX 1...................................................................................................................................1Questionnaire..........................................................................................................................1APPENDIX 2.................................................................................................................................12
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RESEARCH TITLE“To analyse the impact of economic condition on growth of finance and banking sector of Malaysia: A case study on Malayan Bank.”1) INTRODUCTION(1.0) BackgroundMalayan bank is public sector organisation of Malaysia which provides securities on deposited fund and financial aid throughloan and advances to public globally. It is wide spread, and trust worthy entity in all over the world whose revenue is RM21.24 billionin 2015. However, there are so many evolutions identified in its banking system that win maximum satisfaction from public andreliability on its operations. In this regard, there is around 45000 bankers perform job across country as well internationally alsoremains able to increasing in financial services through net banking, mobile banking etc. Including this, management system ofMalayan bank is quite easy and understanding that provide effective comfort ability with its facilities as well social welfare. Alongwith this, it uses CSR implementations for customer dealing and enhancing market value by setting interest rates on loan facilities inaccordance to people's standard and their social lives. Therefore, in present time, this bank is providing financial services on largescale to a million customers over the globe. In addition to this, there are very huge importance of the banking sector in the world bywhich customer and society can get their financial transaction. Economic condition of the country can directly impact the growth offinance and banking sector in the Malaysia.In the present research study, the scholar have major aim is to analyse the impact of economic condition on the growth offinance and banking sector of Malaysia with respect of the Malayan bank. Economic condition of the country direct affect everysectors like finance, bank, retail, hospitality etc. If country have effective economic condition then it because easy to grow thebusiness enterprise. On the other hand, if within the country there is ineffective economic condition then it becomes difficult tosurvive the business. In the context of banking and finance sector, economic condition of the country plays a very crucial role in itsgrowth and progress. If country have well condition of economy then it becomes easy to improve banking performance. On the otherhand if country's economic condition is weak then banking sector directly influence. Thus, in the present research study investigator
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have used various methods of the research methodology by which they can obtain an appropriate solution of the research issue. Inaddition to this, in this research study, scholar have focused on the literature review under which various themes has prepared relatedto the topic. Moreover, several recommendations are justified for effective financial and banking services in wide range. Besides this,different research methods and variables are introduced for financial development and analysing organisation's role in country'seffectiveness is introduced. The major objective of this research study is to understand the importance of economic value in thegrowth and development of banking sector. With help of this study, scholar can bale to understand the various factor which affect thebanking activities ad functions in the country.Malayan bank is a public-sector organization which is functioning in Malaysia since June 1996. Its main objective is to providequality banking services to its customers. Flexible assistance is provided based upon financial needs of the client. Loan assistance andfinancial aiding is another core objective of Malayan Bank in Malaysia (Impact of a banking crisis, 2017).The present research has aim to analyse the impact of economic condition on growth of finance and banking sector of Malaysiaby making a comprehensive assessment of Malayan Bank. There is a significant and direct impact of prevailing economic conditionsof the country on banking and financial sector. Thereby, the research will help in understanding various aspects of economy so thatappropriate solution can be attained to the issue specified in research aim.(1.1) Problem statementIn the environment, economic factor is one of the component which can change very frequent basis. In this componentincludes financial condition of the country, interest rate, inflation, recession etc. The major issue in this present research study isrelated to changing economic condition of the country which directly affect the growth and progress of the banking and finance sector.In addition to this, there are also several issues in the economic condition of Malaysia like regular changes in government policies forreserving fund as well securities and setting interest rates, Issues in increasing in NPA affects revenue and profitability of Malayanbank for further operations. Another major issue related to the Cut throat competition and potential to contribute in nation's economicgrowth. Thus, it can be said that there are several issue related to the growth and progress of banking sector due to the economic
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condition of the country. Due to changes in government policies as rates in CRR, SLR, repo and reverse repo rate affect interest ratesand market structure for providing banking sector. Thus, it can be said that progress and growth of the banking sector is directlyrelated to the economic condition of the country. Thus, in order to understand the various issue of the banking sector and impact of theeconomic condition on the growth of banking, scholar has used various methods of the research methodology. As per the research ithas been founded that in the 2015 the population of the Malaysia is 31.2 and it increased in 2016 by 31.7.The rate of GDP was in 2015was 298 and it has increased 300 in the 2016.Thus, from this data it can be said that economy of Malaysia is continuously changedand its directly impact on the banking sector. It fiscal balance and public debt has also increased by 3.1 to 3.5 in the 2016.Study Gap In the present study, the major aim is to analyse the impact of economic condition on the growth of finance and banking sector in theMalaysia. In the previous study, only impact of the economic condition on the banking sector growth has addressed while in the newterms, scholar have used various methods of the research methodology for obtain an appropriate solution of the research problem. Inthe previous study there is not accurate statistical data about the economic condition of the Malaysia. The major reason for conductthis investigation is to analyse the impact of economic condition of the banking sector in the Malaysia.(1.2) Research objectivesIn the present study, scholar have main aim is to analyse the impact of economic condition on the growth of the finance andbanking sector of Malaysia with respect of Malayan bank. In order to attain this aim, scholar required to attain various objectiveswhich are as follows-To analyse the importance of economy in the banking sectorTo identify the factor which affect the economic condition in the MalaysiaTo evaluate relationship between economic conditions and growth of Malayan Bank
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(1.3) Significance of ResearchIn the present study, the major aim is to analyse the impact of economic condition on the growth of finance and banking sectorin the Malaysia. In order to attain this aim, scholar have to address various objectives such as determine significance of economicvalue in baking sector, identify components which affect working of finance and banking sector in the Malaysia and evaluate therelationship between the economic condition and growth of the Malaysia. However, various issues obtained for finance and bankingservices evolving credit risk, market instability, economic slowdown etc (Fiegen, 2010). In addition to this, the report is able toexplain research frame including hypothesis for further operations. In addition to this, tools for conducting research and collecting dataare understood for analysing actual position of banking system and its management critically. Along with this, collected data ispresented and determined by using statistical tools such as reliability and normative tests proceed to prepare strategy for furtheroperations and enhancing economic position of bank systematically. Thus, it can be said that the present research study provide detailunderstanding about the various issue in the banking sector and impact of economic condition on the banking sector. This reportprovides effective understanding about the significance of economic value in the banking sector. With help of this study, stakeholderof the company can also able to identify the beneficial point from the country economy. The decision maker can also beneficial by thisinvestigation because they able to know that how they should take the decision by analysing the economic condition of the country.With help of this investigation, decision maker can able to take decision about investment in the company. With help of this study,researcher can easily analyse the relationship between the banking sector and economic condition. They can understand that howeconomic condition affect the banking function and activities.Rationale of the researchIt is important that the research that is going to be conducted by the researcher holds some relevance. Every study must have thepotential to serve some specific purpose. The study aims at analysing the impact of economic condition on growth of finance andbanking sector of Malaysia. The research has helped the scholar to gather knowledge regarding the subject matter. Since, the
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researcher does not hold adequate amount of knowledge regarding various economic conditions prevailing in the banking and financesector of Malaysia. The research will help in gathering that information.TASK 2 (LITERATURE REVIEW)To determine the significance of economic value in the banking sectorAs per the view of Gale and et.al., (2013) in the business environment, there are various components consist with it. Eachfactor plays a very crucial role in improving and growing the business enterprise. In this manner, economic factor is one of thecomponent which affect directly and indirectly affect business firm. Economic factor consist with various things like inflation,recession, interest rate, pricing policies etc. Economic growth is one of the ultimate goal of any economic system. Country's economiccondition plays a very crucial role as by which every sector like hospitality, banking, travel and tourism affected. If country'seconomic condition is good and effective then it directly positively affect the progress and growth of the business sector. On the otherhand if country's economic condition is ineffective then it will negatively affect the growth and progress of the business sector. In theopinion of (Andrews and Hampel, (2015) in the context of bank, economic value plays a very crucial role because while country haveeffective economic condition then bank performance can automatically improve. Financial recession and inflation can direct affect thegrowth of bank. There is a huge importance of the economy in the banking sector because the growth and development of bank islargely depends upon the country's economic condition. If the economic condition of the country is good then public can more investand involve in the banking services. Economic condition reflects the entire progress, inflation, recession of the country.To ascertain the impact of economic condition on banking sectorAccording to Usman and Khan (2012), prevailing economic factors play vital role in growth and development of banking sector.There is a direct relationship between the two. An increase in economy will also increase and develop banking sector of a country.There are higher chances of large amount of Non-Performing Assets (NPA) due to deteriorating economic condition of the country. Itshows that there is less amount of cash in the hands of businesses which thereby increases the chances of defaulters from the peoplewho have taken loan from the bank. Further, it also becomes difficult for the bank to maintain inflow and outflow of cash within the
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