In banking industry, spread rate is the difference between debts rate (especially for deposit) and assets rate (especially for loan) interest rate spread has always been one of the most important and significant economic issues in different countries of the world. Results of research shows that many consumers of banking industry consider banks are paying less on consumer savings in term of profit, but charge higher rate of interest on loan and advances in term of markup, although banks get funds form state bank of pakistan and other banks at lower rate.
Creb working paper no 01-10 the determinants of interest rate spreads in pakistan’s commercial banking sector ayesha afzal assistant professor, economics and finance.
This study is about banking consumer perception and awareness regarding banking interest rate spread (irs) in pakistan, many banking consumer perceive that in pakistan, banks are charged more interest rate on loans, but pay a small amount in term of. Interest spread of the pakistan’s banking industry has been on the rise for the last two years the increase in interest spread discourages savings and investments on the one hand, and raises concerns on the effectiveness of bank lending channel of monetary policy on the other.
Methodology and data to examine the determinants of interest spread for pakistan’s banking industry, we employ a variant of the model used by peria and mody (2004) the original motivation is from the dealership model of bank spreads developed by ho and saunders (1981), extended by allen (1988) and angbazo (1997.
Interest spread of pakistan’s banking industry has been on the rise for the last two years the increase in interest spread discourages savings and investments, on the one hand, and raises concerns about the effectiveness of the bank-lending channels of monetary policy, on the.
Study the determinants of bank interest spread using a sample of 14 commercial banks in pakistan for the period of 2000 to 2008 that the most efficient banking structure persists and sustains with minimum possible interest economies his study also found imperfect completion in banking industry of pakistan. Banking: interest spread, inelastic deposit supply and mergers by musleh-ud din and m idrees khawaja1 abstract interest spread of the pakistan’s banking industry had been on the rise for the last two years.