Do the Banks Perform Alike During Economic Slowdown?: A Study of Scheduled Commercial Banks of India

Abstract

A healthy Banking system acts as an important catalyst for the economic development of a country. The global credit crisis precipitated by the collapse of the subprime fuelled U.S. housing bubble is the most recent incident which signifies the interrelation of the health of an economy and the health of its banks. In the era of globalisation, no country can insulate itself from any adverse developments in the international financial markets. However, India could insulate itself from these adverse developments to a certain extent because of little exposure to the investments in structured financial instruments and the timely response made by the Govt. of India and the Reserve Bank of India. In the above back drop this paper seeks to make a performance evaluation of scheduled commercial banks during the period of economic slowdown. The result shows that the foreign perform better than public sector as well as private sector banks.