Restructuring the Arab banking sector

This study delves into the significance and implications of organizational structure as an internal work environment in some Arab and Egyptian commercial banks. It also examines the impact of this approach on the quality of banking services provided to customers and its role in addressing the problems of the entire banking sector. We focus on the complexity and multifaceted nature of the problems plaguing Arab banks in general, and Egyptian banks in particular. We highlight the urgent need for reform interventions to address their inability to keep pace with global developments and the current information and communications revolution. Furthermore, we address the lack of genuine investment in their financial resources, 95% of which are depositors' funds. This is achieved by shedding light on some avoidable phenomena, such as the flight of these banks' savings to various countries around the world and the deliberate avoidance of investment risks by some bank executives who place interest-bearing deposits in various neighboring banks, whether local, regional, or international. This leads to a decline in the overall quality and scope of banking services offered to the public, as well as a decrease in the capital of Arab banks compared to international banks. This is because any activity within the banking system is both influenced by and impacts the overall economic system of the country. The restructuring process or the implementation of banking decisions by some banks necessitates caution, deliberation, and a gradual approach. This is due to the numerous risks, standards, and controls that must be considered before embarking on any reform processes, whether at the economic or banking level, to achieve a large Arab banking entity comparable to global multinational corporations. On the other hand, the restructuring of some of these banks has been implemented as practical cases. We investigated the behind-the-scenes processes to determine the extent to which restructuring contributes to transferring ownership of state-owned banks to the private sector, both foreign and local, and the extent of the benefit accruing to Arab investors or the national economy as a result of this restructuring. Therefore, we proposed several recommendations and a model for a proposed organizational structure that increases the investment of depositors' funds and generates countless returns for the national economy and its banking system, while also reducing unemployment in some Arab countries. We also clarified the role of internal work environment elements in enhancing the performance levels of employees in the banking sector and achieving the desired effectiveness of reform in general.