IMPACT OF ETHICAL BANKING ON ECONOMIC SUSTAINABILITY OF BANKING INDUSTRIES IN NEPAL

Abstract

This study investigates the impact of ethical banking on the economic sustainability of banking industries in Nepal, focusing on key factors such as Ethical Banking Awareness (EBA), Ethical Banking Judgement (EBJ), and Ethical Banking Behavior (EBB). The research is motivated by the growing recognition of the importance of sustainability in banking and the need for ethical practices that can support long-term economic, environmental, and social stability. Data were collected from 207 employees across various banking institutions in Nepal by using a structured questionnaire, measured by Likert scale. And data were analyzed using descriptive statistics and multivariate regression analysis. The study revealed that Ethical Banking Awareness (EBA) and Ethical Banking Behavior (EBB) have significant positive impacts on sustainable banking growth in Nepal. EBA has moderate effect on economic sustainability, suggesting that heightened awareness of ethical practices among bank employees can lead to more sustainable economic outcomes. EBB, on the other hand, demonstrates a strong positive impact across all dimensions of sustainability, underscoring the critical role of ethical behavior in driving sustainable growth. It enriches the existing literature on ethical banking by highlighting the specific ethical factors that contribute to sustainability in the banking sector of a developing country like Nepal. Practically, the findings provide valuable insights for banking institutions and policymakers.