The current study examines the determinants of profitability of Indian commercial banks. The analysis is conducted over a period of 10 years in which the Indian banking sector has gone under different changes such as demonetization and issues related to banking sector sustainability and banking sector frauds. The analysis is based on balanced panel data over a period ranging from 2008 to 2017 for 69 commercial Indian banks. Profitability of Indian banks is measured by two proxies, namely, return on assets (ROA) and return on equity (ROE), whereas bank size, assets quality, capital adequacy, liquidity, operating efficiency, deposits, leverage, assets management, and the number of branches are used as bank‐specific factors. Further, a set of macroeconomic determinants such as gross domestic product, inflation rate, interest rate, exchange rate, financial crisis, and demonetization are used as independent variables. Stationary test along with pooled, fixed, random effect models and panel correction standard error are used in this study. The results revealed that bank size, the number of branches, assets management ratio, operational efficiency, and leverage ratio are the most important bank‐specific determinants that affect the profitability of Indian commercial banks as measured by ROA. Furthermore, among the bank‐specific determinants, the results revealed that bank size, assets management ratio, assets quality ratio, and liquidity ratio are found to have a significant positive impact on ROE. With regard to the macroeconomic determinants, the results revealed that the inflation rate, exchange rate, the interest rate, and demonization are found to have a significant impact on ROA. However, in the case of ROE, the results show that all macroeconomic determinants except demonization have a significant impact on the bank's profitability as measured by ROE.

This study aims at finding out the determinants of Indian commercial banks profitability. Profitability of Indian banks is measured by three important variables namely, Return on Assets (ROA), Return on Equity (ROE) and Net Interest Margin (NIM). The study also uses a set of independent variables such as bank-specific factors which include bank size, assets quality, capital adequacy, liquidity, operating efficiency, deposits, leverage, assets management and the number of branches. Pooled, fixed and random effects models and Generalized Method of Moments (GMM) are built on panel data of 10 years for more than 60 commercial banks of India.The study also takes into account Gross Domestic Product (GDP), inflation rate, interest rate and exchange rate as macroeconomic determinants. The results of the study show that all bank-specific factors, except the number of branches, exhibited significant impacts on profitability as measured by NIM. The findings also show that all macroeconomic determinants used in the study are found to be significant with negative impacts on Indian commercial banks profitability. Furthermore, the results ABOUT THE AUTHORSEissa A. Al-Homaidi is currently a Ph.D. scholar in the Commerce Department, Aligarh Muslim University, India. His research interests include financial reporting, financial performance, disclosure, corporate governance and demonetization.Mosab I. Tabash is currently working as an

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(2017). The impact of political instability, macroeconomic and bank-specific factors on the profitability of Islamic banks: an empirical evidence. Investment Management and Financial Innovations, 14(4), 30-39. doi:10.21511/imfi.14(4 AbstractThis study investigates the impact of political instability, macroeconomic and bankspecific factors on the profitability of Islamic banks in the context of Yemen. The study used two common measures of profitability, namely, Return on Assets (ROA) and Return on Equity (ROE) as dependent variables. Seven key independent (internal and external) variables are also used. There are five fully-fledged Islamic banks (IBs) working in Yemen.The study selected only three out of five IBs due to the availability of data for the period ranging from 2010 to 2014. The descriptive and multiple regression analyses were done. The results of the study indicate that operating efficiency and financial risk have negative and significant relationships with ROA and ROE. The findings also show that capital adequacy has a negative and insignificant relationship with ROA and ROE. Furthermore, the study reveals that assets size (LogA), assets management, liquidity and deposits have a significant and positive impact on banks' profitability. GDP, Inflation rate (IR) and Political instability have positive and significant impact on Yemeni banks' profitability. Based on the best knowledge of the authors, this study is considered one of the first and pioneering studies that determine the factors affecting the profitability of Islamic banks of Yemen. Therefore, the study gives good insights for the policy makers, regulators and interested parties for enhancing the profitability of Islamic banks in Yemen.

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Purpose The main aim of this research is to ascertain the expected duties and performed roles and functions of the Shariah supervisory boards (SSBs) of Islamic banks in Bangladesh. Design/methodology/approach A semistructured face-to-face interview was applied to accomplish the research objectives. In total, data was collected from 17 respondents with a combination of regulators, SSBs, Shariah department executives and experts from the central bank and Islamic banks in Bangladesh. Findings This study finds that the expectations of Islamic banks toward SSB members are to provide opinions on Shariah issues, guidelines and decisions regarding the modern banking, practices and delivering of fatwas on the contemporary issues offered by the management to fulfill the demand of the numerous stakeholders. In addition, they can develop Shariah governance (SG) policies and implement those guidelines, approve and develop new products, observe and monitor banking functions, identify problems and outline solutions as well as they should ensure Shariah principles and compliance. The SSBs members perform roles and functions in monitoring and reviewing overall banking activities and functions; reviewing products, services and contracts; preparing SG guidelines; ensuring Shariah principles and compliance; providing opinions on existing SG practices and finally, delivering Shariah resolutions on the overall functions. Research limitations/implications This study significantly contributed to the national regulatory bodies by providing suggestions that the existing SG system should be improved to enhance the overall monitoring of SSB and ensure more Shariah compliance in the overall operations of the Islamic banks in Bangladesh. Originality/value This is the first research to the best of authors’ knowledge that explores the expected duties and performed roles and functions of the Islamic banks concerning Bangladesh. This study also contributes to the agency, legitimacy and stakeholder theories by outlining the expected and performed roles of SSBs to the Islamic banks and stakeholders.

The research paper's fundamental objective is to examine the ethical legitimacy of the Islamic banks through the two crucial internal mechanisms of Shariah Governance (SG), that is, Shariah Supervisory Board (SSB) and Shariah officers. A semi‐structured questionnaire has been applied to collect data for attaining the research objectives. However, 17 respondents have been interviewed who have practical experiences concerning Islamic banks and SG. The study explores inappropriate SG practices, reporting, disclosure, and fatwas resolutions, which generate confusion among the customers and damage Islamic banks' institutional image. Islamic banks do not follow the proper SG guidelines and Shariah principles. These findings denote a negative legitimization of Islamic banks and SG practices. The study considerably contributes to the enhancements of the responsibilities of the national and global regulatory bodies by providing internal Shariah authorities authorization from their ethical perspective. This research has numerous unique practical implications for the Islamic banks and the central bank of Bangladesh, which will help them to apply Shariah principles, improve the SG practices, and enhance Shariah compliance quality. This research extends the literature concerning SG and the legitimacy, legitimacy theory, and institutional theory of the Islamic banks concerning Bangladesh. This is the first research that explores the ethical legitimacy of Islamic banks.

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