THE IMPACT OF DISCOUNT RATE ON THE PROFITABILITY OF ISLAMIC & CONVENTIONAL BANKS OF PAKISTAN (2009-2013)

Abstract

PURPOSE The purpose of this research is to study the impact of discount rate on the profitability of Islamic & Conventional bank (2009-2013). METHODOLOGY This study involved the data obtained from annual reports of Islamic and Conventional Banks from 2009 to 2013 for secondary purpose. To analyze the data one sample test and Correlation have applied through SPSS. This analysis is done to check the relationship between the independent and dependent variables. FINDINGS The aftereffects of the study are exceptionally empowering on the grounds that the execution and productivity of Islamic banks are obviously better than Conventional banks. Islamic banks beat Conventional banks in profitability. PRACTICAL IMPLICATION The outcomes of the research help the Conventional Banking Sector to review their policies or procedures as they are not working well or it is better to convert to Islamic Banking Sector rather than opening Islamic window and also help Islamic Banking Sector to provide awareness to the public about the Islamic products as they are growing rapidly as well as also help the State bank of Pakistan to shut down the Conventional Banking and promote Islamic Banking Sector so that Muslims are free from Interest.