• Obaidullah Zarifi
• Abdul Monir Kakar

The present study investigates the comparative efficiency of conventional and Islamic banks in Pakistan using two analytical techniques: Data Envelopment Analysis (DEA) and Tobit Regression. DEA is a non-parametric method that evaluates the efficiency of Decision Making Units (DMUs) by considering multiple inputs and outputs. The study adopts an input-oriented CCR model, utilizing staff numbers, fixed assets, loanable funds, and equity as inputs, and advances and investments as outputs to compare the efficiency of conventional and Islamic banks. The results indicate that conventional banks outperform Islamic banks in terms of profitability, whereas Islamic banks exhibit greater stability with no windfall in profits. To explore the determinants of efficiency, Tobit Regression is employed. The findings demonstrate that Return on Assets (RoA) and Return on Equity (RoE) have a significant positive association with efficiency, while Size and Diversification are not significant determinants. Moreover, the Dummy variable indicates that conventional banks are more efficient than Islamic banks. The findings provide useful insights into the determinants of efficiency and suggest that conventional banks outperform Islamic banks in terms of profitability. The study's results may guide policymakers and bank management in enhancing the efficiency of Pakistani banks.

Data Envelopment Analysis, Efficiency, Decision Making Units, Tobit Regression, Conventional Banks, Islamic Banks.

"An Empirical Analysis of the Efficiency of Conventional and Islamic Banks in Pakistan: A Data Envelopment Analysis and Tobit Regression Analysis", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.11, Issue 2, page no.a370-a376, February-2024, Available :http://www.jetir.org/papers/JETIR2402046.pdf

"An Empirical Analysis of the Efficiency of Conventional and Islamic Banks in Pakistan: A Data Envelopment Analysis and Tobit Regression Analysis", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.11, Issue 2, page no. ppa370-a376, February-2024, Available at : http://www.jetir.org/papers/JETIR2402046.pdf