Is Internet Banking a determinant of Liquidity and Asset Quality? Empirical Evidence of Pakistan Banking Sector

Abstract

In this paper, we investigate the effects of internet banking on the liquidity and asset quality of Pakistan banking sector overall, for the period of 2004 to 2013, quarterly. To evaluate the regression among the variables, SPSS has been used on the collected data for 46 operational banks in Pakistan. Though, results have enlightened that 1% increase in transaction via internet banking will lead toward more than 1% enhancement of liquidity and asset quality of banking sector in Pakistan. As liquidity and asset quality are components of CAMELS/ CAELS for measuring the performance of banking sector in Pakistan.

Keywords: Internet Banking, Liquidity, Asset Quality, Pakistan Banking Sector