Abstract:
The recent global financial crises emphasized this idea and shown that the problem of bank governance is very severe. Therefore, this study was carried out as a comparative study of Islamic and conventional banks‘ corporate governance and banking performance in Sri Lankan context. This study‘s main objective is to compare the different corporate governance and banking performance practice of Islamic and conventional bank of Sri Lanka and also identify the relationship between corporate governance and banking performance in conventional and Islamic bank of Sri Lanka. The study is based on secondary data, which covers a period of four years, i.e. 2011-2014.Two banks are selected for this study. One is for Islamic Banks and other one bank is from Conventional banks. To analyze the data and find out Ratio analysis, descriptive statistical techniques and Correlation Analysis were used as a method of analysis. Key findings of this study, there is a different corporate governance practice and banking performance between Islamic and conventional banks. The results revealed that, variables of corporate governance are positively correlated with ROA in conventional bank as well as , Islamic bank except BS and NED other variables have normal negative relation with ROA which is not significant. Similarly, except BS and NED other variables have negative association with ROE in both banks. BS has strong negative with ROE in conventional banks, But Islamic bank has a normal negative relationship. Further corporate governance has a moderate impact on the performance of both Islamic and conventional banks. Practice of Islamic bank‘s corporate governance poorer than Practice of conventional banks‘ corporate governance in Sri Lanka. The implication of this research will guide for the decision makers, policy makers as well as a future researcher.
