Impact of Capital, Interest Rate & Operating Risk on Credit Facilities of Conventional Banks in Yemen^
Syed Azharuddin

Professor, Department of Commerce,
Dr. BabaSahebAmbedkarMarathwada University,
Aurangabad-, M.S, India.
Phone: 9422214865,E-Mail: drsyedazharuddin[at]gmail.com

Abstract

Traditional banks in Yemen remained licensed to receive various deposits and invest them in whole or in part with the bank^s other assets, or in any other way allowed by law. Referred to as financial organizations that make money by collecting various deposits and reinvesting them in various sectors, or as a middleman for receiving deposits from surplus units and making loans to those units that are in need of money or in the field of investment. Recent governmental and financial instability in the region necessitated research on the impact of banking risks on loan facilities, including capital, interest, and operational risks. During the years 2012 to 2021, financial data was obtained from four banks, and the data were analyzed using the regression approach and a significant test. Inspection of the sample banks and study of financial indicators of capital risk, interest rate risk, and operational risk served the analysis. The association between these banking risks and credit facilities was discovered using statistical approaches. It was found, there remains an inverse relationship between capital risks and credit facilities, also there was an inverse relationship between interest rate risk and credit facilities, and there was no statistically significant relationship between operating risk and credit facility. The size of bad debts facing capital risk along its effect on the volume of credit facilities was studied and the recommendations to improve their performance were proposed.

Keywords: Conventional banks, Capital risk, Interest rate risk, Operational risk, Size of bad debts facing capital risk

Topic: Business and Economic