By Sajid Khan
Abstract:
The purpose of this study is to assess the Islamic banking performance in Pakistan and forecast its future growth using the ARIMA Model. Islamic Banking system is an emerging field in Pakistan and showing an escalating trend from the last five years. This is a very unique study in its nature because for the first time ARIMA Model is used in the predication of the growth of Islamic banks in Pakistan. The attempt was made to statistically forecast its growth by fitting ARIMA Model using the quarterly data for a period of seven years w.e.f December 2003 to June 2010. The results of the ARIMA Models are very encouraging and showing a continuous improving trend in the Assets and Deposits of the Islamic banking System in Pakistan. This study will motivate the potential investor to invest in Islamic banking as it is growing at a rapid speed as well as the educational institutions can focus on the introduction of Islamic Banking and Finance as new field of study at university level. This study further pave the way for further research and utilization of Econometrical Models in the field of Islamic banking and finance.
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