Performance Of Indian Banking Sector Research Articles

Measuring Impact of CAMELS Model on Financial Performance of Indian Commercial Banks

The purpose of this study is to examine the effects of CAMELS components on the financial performance of Indian commercial banks. To fulfill the objectives of the study,secondary data were collectedfor the fiscal year 2016 to 2021 from four public sector and four private sector banks based on their market capitalization. To analyse the data two econometric models are constructed using return on assets (ROA) and return on equity (ROE) as proxies for commercial banks’ financial performance as dependent variables and six CAMELS’s key indicators (capital adequacy, asset quality, management efficiency, earning quality, liquidity, and sensitivity to market risk)as independent variables. To determine the extent to which the independent variables have an effect on the dependent variable, panel ordinal least square regression with their assumption has been used. The findings of the study revealed that the financial performance of Indian banking sector as evaluated by ROA and ROE is statistically and significantly affected by capital adequacy, liquidity and sensitivity to market risk, whereas asset quality, managerial efficiency and earning quality is found to have insignificant impact on the financial performance of Indian commercial banks. In order to perform better, it is suggested that the commercial banks should focus more on the variables that have a substantial impact on their financial performance. Keywords: Random effect, ROA, ROE, liquidity, sensitivity to market risk, CAMELS.

Impact of Green Human Resource Management Practices on Environmental Performance of Indian Banking Sector: An Empirical Study

Impact of Green Human Resource Management Practices on Environmental Performance of Indian Banking Sector: An Empirical Study

The Impact of Mergers and Acquisitions on the Financial Performance of Indian Banking Sector: An Analytical Study

An efficient and sound banking system is one of the cornerstones of a strong economy. India’s banking system differs greatly from that of other Asian countries due to the nation’s distinct geographic, social, and economic attributes. The banking industry makes a significant contribution to the Indian economy by providing timely loans to all societal segments while also collecting deposits from them. Commercial banks promote balanced regional development in India by providing the required financial infrastructure and finances for underdeveloped areas. They also encourage individuals to preserve their money and use it for investments in profitable endeavours, so fostering economic growth and resulting in a significant boost to employment prospects. In recent times, the Indian banking sector is an industry that is expanding quickly and changing its shape through mergers and acquisitions with prime objectives to control the rise in bad loans or non-performing assets, robust financial health, upgradation of technology and ensure better scale efficiency. Numerous domestic and foreign banks are involved in merger and acquisition activities. This study tries to examine how major mergers and acquisitions have operated in the Indian banking industry. A crucial pre-requisite is the integration of the Indian banking sector through mergers and acquisitions based on business considerations and strategies. Bank mergers encourage institutions to expand globally and create better synergy while also enabling larger banks to acquire the troubled assets of smaller banks. Thus, the present paper is an initiative to elucidate the need for bank mergers and acquisitions and to study the impact of such mergers and acquisitions on the equity shares of the shareholders’ capital and on the financial performance of the concerned banks.

Performance of Indian Banking Sector – A Comparitive Study of SBI and HDFC

Performance of banks is a key indicator of any economy. Both public sector and private sector banks have performed extensively in India. So this paper compares the performance of two leading banks in India one being a public sector bank State Bank of India (SBI) and another private sector bank HDFC using secondary data for the previous eight quarters spread over two years. The performance measurement of any financial institution is a difficult task due to existence numerous performance indicators. The study uses interest earned, operating profit, net profit, EPS, NPA and return on assets as performance indicators. Further these data are used to calculate simple arithmetic mean, standard deviation and hypotheses testing. Conclusion are drawn based on these statistical tools.

Stressed assets, off-balance sheet business activities and performance of Indian banking sector: a DEA double bootstrap approach

PurposeThis paper examines the technical efficiency (TE) of Indian commercial banks during 1998–2015.Design/methodology/approachThis study uses mathematical programming-based data envelopment analysis (DEA) methodology to measure technical efficiency of Indian banks. Further, Simar and Wilson (2007) double bootstrap procedure is applied to examine the determinants of efficiency of the Indian banks, by examining the effects of various bank specific and other contextual variables.FindingsThe results indicate substantial upward bias in the conventional efficiency estimates of the Indian commercial banks. Needless to note, such upward bias is consistent with the theoretical postulates. The bootstrapped regression results show that increasing capital adequacy ratio is positively associated with bank efficiency. The popular belief that non-performing assets have a dampening effect on performance of banks is validated. Among others, ownership category is observed to be an important determining factor of bank efficiency. Specifically, state-owned banks (SOBs) are relatively lagging behind the foreign banks. Moreover, larger banks are observed to have a significantly higher level of efficiency, therefore, recent official policy initiatives toward consolidation of SOBs are validated.Originality/valueAs this study uses Simar and Wilson (2007) bootstrap approach, it enables the authors to have an estimate of the extent of bias in the traditional DEA TE scores. It also helps us drawing consistent inferences by rectifying the problem of serial correlation in the conventional second stage regression in this regard.

A study on Factors affecting Financial performance of Indian Banking Sector

In India there are different sectors which play the major role of accelerator in the growth of Indian economy. In this study, the area of focus is financial transactions sector specially banking sector which plays a momentous role in the economic growth by regulating and controlling the demand for and supply of money. The Indian banking sector supports the fastest growing economy of the world but it is grappling with multiple challenges. This research work analyzes the different variables that affect the financial performance of scheduled commercial banks in India and establish the relationship between selected macroeconomic variables and financial performance indicator. It also highlights the role of banking in changing economic scenario of India. The present study is empirical by nature. Descriptive cum exploratory research design has been used in this study. It has been found that GDP, CPI, exchange rate and lending interest rates are significant macroeconomic variables for determining the financial performance of scheduled commercial banks in India. It has been revealed that long term relationship exists between the selected macroeconomic variables and financial performance variables.

Social and financial performance of Indian banking sector

Banking sector of any country plays dual role, in achieving the social goals on the one hand and improving the financial strength on the other. The study analyses the role of Indian banking sector in discharging social obligations as per recent guidelines and impact of the same in improving financial returns. Significant negative relationship is found between the social and financial performance of Indian banking sector. Although social responsibility is taken as an important tool for improving the financial performance of corporate sector but Indian banking sector is not able to get this benefit may be due to lack of awareness among people regarding the social initiatives undertaken by banks or the cost involved in undertaking these social initiatives is much more than the benefit Indian banks are able to get in the form of financial returns. The study gives an idea about how Indian banking sector is discharging social obligations but this information does not reach the society at large to reap the benefits of financial returns.

Social and financial performance of Indian banking sector

Banking sector of any country plays dual role, in achieving the social goals on the one hand and improving the financial strength on the other. The study analyses the role of Indian banking sector in discharging social obligations as per recent guidelines and impact of the same in improving financial returns. Significant negative relationship is found between the social and financial performance of Indian banking sector. Although social responsibility is taken as an important tool for improving the financial performance of corporate sector but Indian banking sector is not able to get this benefit may be due to lack of awareness among people regarding the social initiatives undertaken by banks or the cost involved in undertaking these social initiatives is much more than the benefit Indian banks are able to get in the form of financial returns. The study gives an idea about how Indian banking sector is discharging social obligations but this information does not reach the society at large to reap the benefits of financial returns.

Mounting of Non-Performing Assets and its Impact on the Performance of Indian Banking Sector (A Comparative Analysis on the Public & Private Sectors and Foreign Banks)

Mounting of Non-Performing Assets and its Impact on the Performance of Indian Banking Sector (A Comparative Analysis on the Public & Private Sectors and Foreign Banks)

Effectiveness of Automated Customer Centric Banking Services on Profitability and Performance of Indian Commercial Banks

The banking sector plays a very vital role in the economic development and growth of a country. The effective and efficient banking sector is thus the fundamental requirement for smooth functioning of any economy. In the present study an attempt has been made to assess the technical efficiency and performance of Indian Banking Sector. This study uses DEA approach to estimate the technical efficiency of commercial banks in India over the years 2009-2014. Data Envelopment Analysis (DEA) is widely used in banking sector to measure the efficiency and performance of the banks. The study is based on top 24 Indian commercial banks (6 public, 6 new private, 6 old private and 6 from foreign sector banks). The results of the study indicated that old private sector banks and foreign sector banks were found more efficient than new private sector banks, whereas new private sector banks did not use their IT inputs well. In consideration of scale inefficiency analyzed that foreign sector banks have done well in the field of using their input efficiently than other banks.

Management of Non-Performing Assets in Indian Banks and its Challenges

Increase in non-performing assets has become a major area of concern for all stakeholders of Indian banking players. Provisioning requirements, consequent to higher non-performing assets and higher interest expenses have put pressure on the banks' profitability. The objectives of the study are to compare and contrast the performance of Indian banking sector with respect to its peer nations with specific emphasis to accumulation of NPA, to identify the causes of increase in NPAs in Indian banks and to recommend the necessary means through which NPA can be reduced to a significant extent. The research paper has taken into consideration the secondary data available in several research articles published in the different reputed national and international journals downloaded from EBSCO host and Emerald. Apart from these, different knowledge reports available in the public domain are also considered as the source of key information inputs. The paper will give a new dimension in the literature of NPA management after taking into account the guidelines of the Basel Committee on Banking Supervision to manage the credit risk. The focus of the research work is to identify the scope and direction of Indradhanush framework, an innovative initiative by the Ministry of Finance, Government of India to combat against the curse of NPA. The paper analyses the impact of recapitalization of Indian banks and puts a major impetus on knock out ratio to judge the financial health of the banks.

EVALUATING THE PERFORMANCE OF INDIAN BANKING SECTOR USING DEA DURING POST-REFORM AND GLOBAL FINANCIAL CRISIS

The purpose of the study is to examine the performance of Indian banking sector in terms of efficiency, returns to scale, and total factor productivity change. The technique of data envelopment analysis is applied due to its flexibility to incorporate multiple inputs and multiple outputs without any underlying assumption on the functional form. There is growing tendency of public sector banks operating under increasing returns to scale, implying that substantial gains could be obtained from altering scale via either internal growth or consolidation in the sector. In terms of productivity, the results show a positive change in both the sectors due to technological change, possibly as a result of adoption of latest technology and new business practices in post reform period. However, there is an evidence of shrink in the market and negative growth in productivity in both the sectors during the period of global financial crisis. The main contribution of the paper is to empirically provide the evidences to resolve the debate if the global financial crisis had any impact on the performance of banking sector in India.

Multivariate Analysis of Indian Banking Sector Performance: A Camel Framework Approach

The objective of banking sector reforms in India was in line with the overall goals of the 1991 economic reforms of opening an economy, giving a greater role to markets in setting prices and allocating resources, and increasing the role of private sector. In the following years, reforms covered the areas of (1) stabilization of banks; (2) partial privatization of state owned banks; (3) liberalization including interest rate deregulation, the reduction of statutory pre-emption, and the easing of directed credit rules; (4) changes in the institutional framework, and (5) entry deregulation for both domestic and foreign banks. The increased opportunities for the banks provided by the deregulation have extended their portfolios, but at the same time introduced new uncertainties and risks. The present paper aims at examining the performance of Indian banking sector using CAMEL framework. CAMEL stands for Capital adequacy, Asset quality, Management, Earnings and Liquidity. We have used the modified version of this framework in which one more factor has been included i.e., Systems and Control.

Global Financial Crisis and Banking Sector Efficiency: The Indian Perspective

Banks play a crucial role in developing and least developed economies by facilitating in trade finance. Banks established an important linkage in international trade by guaranteeing international payments and thereby reducing the risk of trade transactions. The Banks in India has witnessed a significant growth, specialization and diversification since the initiation of financial sector reforms in 1991and further slowdown in the economy as a result of global financial crisis in 2008-2009. This study examines the performance of Indian banks using data envelopment analysis. Though, there are large number of literature have been published on banking efficiency, This is an attempt to investigate the impact of global financial crisis on performance of Indian banking sector. The sole objective of this study is to exhibit, utilizing empirical data, the quantum to which the global financial crisis had an impact on the performance of the Indian banking industry. This study gives a comparative empirical analysis of the technical efficiency of Indian commercial banks during pre and post crisis period covering 2005-2012 using non parametric technique i.e. Data Envelopment Analysis (DEA). This period is consisting of pre and post global crisis period which is characterized by far reaching experience of crisis period (2008-2009) and its impact on the efficiency of the Indian banking sector. Overall, the results reveal that the effect of international financial crisis on the Indian banks has not been significant. Instead, the analysis reveals there is a statistically insignificant improvement in the efficiency of Indian banks’ following international financial crisis. Furthermore, the paper shows that the commercial banks have a high degree of resilience and stability.

Structure, Conduct and Performance of Indian Banking Sector

Abstract In the context of initiation of economic reforms in general and changes in policies and regulations of the banking sector in particular, the present paper attempts to examine the structure-conduct-performance relationships in Indian banking sector. It is observed that there have been changes in the market structure of Indian banking sector, conducts of the banks and their performance in the post-reform era, especially during the last decade, though the changes have not been significant in every aspect. Using a panel dataset of 59 banks operating in India during 1999-2000 to 2008-2009 and applying the two-stage least squares (2SLS) method of estimation, the paper finds that there exist strong inter-linkages amongst structure of the market, banks’ conduct and their financial performance. While market share of a bank depends directly on its market size, asset base, selling efforts, and past financial performance, its selling efforts vary directly with market share, asset base, and past financial performance. On the other hand, returns on assets of a bank vary directly with its market share, but inversely with its asset base and selling efforts. The regression results essentially suggest for multidirectional and dynamic SCP relationships in Indian banking sector. It is also found that the nature of ownership has significant influence on market share, selling efforts and financial performance of the banks. As compared to the nationalised banks, market share of the private banks (both domestic and foreign) is found to be lower. But private banks make greater selling efforts and have better financial performance vis-à-vis their public sector counterparts