Issue #2 (Volume 21 2026)

Type of the article: Research Article

Abstract
This study examines the impact of exchange rate fluctuations on banking and financial service indices in India. To validate this, five exchange rates are considered based on their relative share in the total foreign remittance inflows to India, viz., Arabian Dirham (AED/INR), Great Britain Pound (GBP/INR), Saudi Riyal (SAR/INR), Singapore Dollar (SGD/INR), and US Dollar (USD/INR). The study includes daily data of a decade (2015–2025), and employs various econometric techniques such as ADF test, Johansen cointegration, Vector Error Correction Model (VECM), and Impulse Response Function (IRF) for the analysis. The Johansen cointegration test indicates a long-run relationship between exchange rates and both the sectoral indices, as the probabilities are less than 0.05. The VECM analysis for both the Nifty Bank and Nifty FinServ identified USD/INR (2,308.66; 2,257.58) and SAR/INR (373.25; 360.73) as the dominant long-term drivers, whereas AED/INR (–2,671.406; –2,608.011) acts as a persistent structural anchor with a negative influence. In the short run, shocks in USD/INR and SGD/INR generate immediate positive effects, whereas volatility in AED/INR and SAR/INR leads to temporary negative deviations before the system converges back to the equilibrium. The impulse response function indicates that exchange rate shocks have temporary effects on both the indices, which dissipate quickly, reflecting rapid market adjustment and overall efficiency. The findings of this study will help policymakers to improve the exchange rate risk monitoring system and executives in banks and financial institutions to formulate their hedging strategies. For investors and portfolio managers, the findings suggest that currency movements can serve as early indicators of market fluctuations, thereby supporting more informed investment decisions.

Type of the article: Research Article

Abstract
Sustaining employee engagement has become essential for the operational efficiency and service quality of Indian public sector banks, particularly as Generation Y employees increasingly constitute a major share of the workforce. This study aims to empirically validate a gender-moderated structural model of employee engagement among Generation Y employees in Indian public sector banks. Data were collected from 223 Generation Y employees across public-sector banks in India, using a combination of a paper-based questionnaire and an online Google Forms survey. Variance-based structural equation modelling was used to assess the measurement and structural models, while multi-group analysis explored gender-specific differences in the hypothesized paths. Six significant antecedents of employee engagement were identified: Corporate Social Responsibility, Dispositional Characteristics, Psychological Availability, Psychological Safety, Perceived Supervisor Support and Transformational Leadership, and Social and Interpersonal Relationships. Engagement positively affected Organizational Citizenship Behavior and Task Performance, and mediated all antecedent–outcome relationships. Gender-based differences emerged, with Corporate Social Responsibility and Dispositional Characteristics more influential for women, while Fit Perceptions and Distributive Justice showed stronger effects for men. The study contributes to the banking literature by offering a multidimensional, empirically tested engagement model and demonstrating gender’s moderating role.

Type of the article: Research Article

Abstract
Fraud remains a pervasive challenge undermining financial integrity and stability in the banking sector, particularly in developing economies. This study investigates the determinants of fraud detection effectiveness in Indonesian Regional Development Banks (RDBs), focusing on auditor competency, internal control effectiveness, risk-based internal audit, risk management processes, and information technology utilization. The study population consisted of internal auditors, managers, and audit committee members at Indonesian Regional Development Banks. Using a quantitative approach with 204 survey responses analyzed through Partial Least Squares-Structural Equation Modeling (PLS-SEM), the results show that all five factors have a significant positive effect on fraud detection (R2 = 0.554). Risk-based internal audit demonstrates the strongest influence (sig 0.000 < 0.05), followed by risk management processes (sig 0.003 < 0.05), information technology (sig 0.002 < 0.05), internal control effectiveness (sig 0.001 < 0.05), and auditor competency (sig 0.017 < 0.05). The results reveal that all five factors significantly enhance auditors’ ability to detect fraud. These findings indicate that governance mechanisms and digital capabilities jointly enhance fraud detection effectiveness in RDBs.

Acknowledgment
The authors would like to thank the Universitas Sumatera Utara, Indonesia, especially the Research Institute, for its support and the Ministry of Education and Research through the Directorate of Research, Technology, and Community Service program for providing intellectual assistance and funding for this project in the PMDSU grant (number: 83/UN5.4.10.K/PT.01.03/KP-DRTPM/2025).