Muhammad Farhan, Prof. Dr. Hassan Mobeen Alam Hailey College of Commerce, University of the Punjab, Lahore Pakistan Lect. Shaista Jabeen Lahore College for Women University Lahore, Pakistan
The growth of non-performing bank loans in developing and developed economies has added fuel to bank’s failure fire. Banking failures not only hurt economy of a single country but also hamper the global economy. The suppression of non-performing bank loans is a compulsory condition for the economic growth. If these non-performing bank loans are not controlled and continuously rolled over, the resources are jammed in unsuccessful (unprofitable) sectors; thus, jamming the economic expansion and damaging the economic efficiency. Furthermore, substantial increase in credit risk has devastating impact on foreign trade. This study is based on survey approach about socio-political and legal determinants of nonperforming loans in banking sector. For this study, Primary data has been collected through questionnaire from 318 professional bankers who make/supervise lending decisions. Correlation and multiple regression analysis have been used to test the impact of selected variables (Negative Personal Intentions, Political Influence, Banker’s Incompetence and Inefficient judicial system and executive) on non-performing bank loans and to analyze the primary data retrieved from the bankers. Results indicate that all independent variables (Negative Personal Intentions, Political Influence, Banker’s Incompetence and Inefficient judicial system and executive) have a significant positive relationship with the non-performing bank loans. In the end, this study provides some policy implications and suggestions to control the increasing non-performing bank loans for the betterment of world economy.
Keywords: Non-performing bank Loans, Social Determinants, Corruption, Political Influence, Judicial System JEL Code: G, G21
InTraders International Trade Academic Journal Broadcast range: July-December The journal's main subject is international trade. For 2024 and beyond, it accepts economy-based studies outside international trade and original studies on tourism issues. Manuscript language: English (Should not include abstracts in languages other than English. ). https://dergipark.org.tr/en/pub/intraders
