COST AND REVENUE EFFICIENCY OF ISLAMIC BANKING OPERATIONS OF TANZANIA COMMERCIAL BANKS

Abstract

The objective of this study was to assess effects of cost and revenue efficiency of Islamic banking operation of Tanzanian commercial banks. The study found the Tanzanian commercial banking’s economic efficiency of all banks were not stable over the years and, their stochastic frontier performance was not 100% efficient. Based on empirical analysis the study also found deposit and trade financing were significantly influence economic performance. To further improve and maintain stability of the commercial banking economic performance, commercial banks management should use economic performance measurement techniques banks are encouraged to develop human resource for better management efficiency and employee proficiency on the other hand, Tanzanian commercial banks should maintain sufficient liquidity because; the present findings indicate overwhelming liquidity than the required.