Private Sector Commercial Banks Research Articles

Comparative financial performance analysis of commercial banks in India

Commercial banks are financial institutions that perform the functions of accepting deposits from the general public and giving loans for investment with the aim of earning profit. These banks play a key role in the growth and development of an economy. In India, commercial banks are broadly classified into public sector commercial banks, private sector commercial banks, and foreign commercial banks. In the present study, the researchers have made an attempt to examine the financial performance analysis of public sector and private sector commercial banks in India. The study covers the top five public sector commercial banks and the top five private sector commercial banks. The study is based on secondary data extracted from books, journals, financial statements of the banks under study, and other websites. The study period is 5 years—from March 2019 to March 2023. Financial performance and Market capitalization parameters along with key banking ratios were used for the analysis and ajudgmental sampling technique was used for selecting the sample.

Managerial discretion and loan loss provision practices: an empirical study of the Indian public and private sector commercial banks

Managerial discretion and loan loss provision practices: an empirical study of the Indian public and private sector commercial banks

Organizational Commitment and Perceived Organisational Support : A Study with Reference to the Employees in Private Sector Commercial Banks

Organizational Commitment and Perceived Organisational Support : A Study with Reference to the Employees in Private Sector Commercial Banks

Profitability Analysis of Commercial Banks: Evidence from Bangladesh

The aim of this study is to examine the performance of local commercial banks of Bangladesh. Considering the coefficients and their significance level, it can be concluded that Net Interest Margin (NIM), Return on Equity (ROE), Net Profit Margin (NPM) and Earning per Share (EPS) play an important positive role in determining commercial banks’ overall profitability. The suggestion of this study for future analysis is to introduce additional bank specific, industry specific and macroeconomic variables in order to get more appropriate results. In order to determine the profitability of the private sector commercial banks of Bangladesh, this report took into consideration ten banks and measured the profitability by the Return on Asset (ROA). From the two regression models, the strongest one was the internal measure of profitability that has been done by taking Return on asset (ROA) as the dependent variable. This study will help the management to look into areas that are relevant and can thus exert potential and strong impact on their banking profitability. Since, this study breaks away from the traditional ratio analysis, which is retrospective and based on accounting rather than economic data; it can be beneficial as a base for other researches.

Managerial Discretion and Loan Loss Provision Practices: An Empirical Study of the Indian Public and Private Sector Commercial Banks.

Managerial Discretion and Loan Loss Provision Practices: An Empirical Study of the Indian Public and Private Sector Commercial Banks.

Short-term determinants of banking profitability and financial sustainability of banks in Bangladesh: An empirical study of COVID-19 effects

The purpose of this study is to examine the profitability and financial sustainability of banks in Bangladesh before and during COVID-19. The study compares the profitability and financial sustainability of 23 listed private commercial banks. The data for short-term periods before the COVID-19 and during the COVID-19 crisis we used. Financial ratios, descriptive statistics, correlation matrix and linear regression model estimations are used for the analysis of data. The mean values of ROA, ROE and NIM are found before the COVID-19 crisis as 0.0019, 0.0270 and 0.0054, and during the COVID-19 as 0.00128, 0.01856 and 0.00321 respectively. On the other hand, the mean values of NFLR, CCR, ICR, and OSR are found before COVID-19 as 2.0936, 6.852, 0.9314 and 0.4751, and during COVID-19 as -2.5961, 5.879, 0.7673 and 0.3587 respectively. The findings construe a significant impact of the unprecedented pandemic. Within a short period of time, sample banks’ profitability and financial sustainability deteriorated significantly. A key implication of our study is that the private-sector commercial banks in Bangladesh experienced severe financial difficulties during COVID-19 which impacted their profitability and financial sustainability. The findings of the study suggest that adverse economic events have substantial effects on the financial realities of financial institutions. The findings of the study are expected to be useful to both academics and policymakers.

Customer Relationship Management Practices and Employee Sensitivities of Private Sector Banks: An Analysis in Indian Context

This paper aims to scrutinize bank employees' perspectives on customer relationship management (CRM) practices in the banking sector, particularly private sector commercial banks operating in Goalpara District of Assam, India. The research plan consists of experimental in nature whereby different aspects of CRM in the banking sector have been extracted from the previous literature and tested on a sample size 24 number of employees working in the banks selected taking 3 each from 8 branches. Based on Bank Service Quality (BSQ) scale, variables were selected and analysed with the help of descriptive statistics and ranking analysis of identified parameters was utilized with the help of the Garret ranking technique. The study found that the loan facility and ATM facility along with service variety are found as the major product-related factors; timely services with trustworthy behaviour of the employees and the quality of services along with procedural simplicity and convenience is the most important service-related factors for evolving an effective CRM practice. The employee perceptions on the personal relationship of the bank officials with their customers’ staples in selecting the banks and retaining the customers.

Effects of politically controlled boards on bank loan performance: an emerging economy perspective

PurposeIn this study, the authors explore the effects of politically controlled boards on bank loan performance in both state-owned commercial banks (SCBs) and private sector commercial banks (PCBs) in Bangladesh.Design/methodology/approachThe data consist of 409 bank-year observations from 46 sample SCBs and PCBs of Bangladesh for the period 2008–17. The authors apply ordinary least squares pooled regression with year fixed effect for baseline econometric analyses and generalized method of moments regression for robustness tests after addressing the endogeneity issue.FindingsThe regression results reveal that the presence of bank “boards controlled by politically affiliated directors” (PA) have significant positive effects on non-performing loans (NPLs). Similarly, the presence of “boards controlled by politically affiliated directors without substantial ownership interests” (PAWOI) show positive association with NPLs. In contrast, the presence of “boards controlled by politically affiliated directors with substantial ownership interests” (PAOI) exhibit an inverse relationship with NPLs. These findings support ‘agency conflict’ arguments and document that both PA and PAWOI are detrimental to bank loan performance in Bangladesh, while PAOI do not have significant effect on increasing NPLs.Originality/valueThis study contributes to the existing bank governance literature by providing evidence from an emerging economy perspective, where politically affiliated directors (PADs) exploit their positions for personal and/or political gain at the cost of other stakeholders by taking advantage of relaxed regulatory oversights and investor protections.

Entrepreneurial orientation and strategic management practices in commercial banks

Entrepreneurial orientation by the companies has generated considerable attention in research due to its importance to corporate vitality and generation of wealth in today's global context. Corporate entrepreneurial orientation facilitates the companies' effort to exploit its current advantages, opportunities and competencies required to pursue them successfully. This also contributes to the evolution of corporate strategy by building new opportunities that enable recreation foster strategic change and increases company's performance. Overall, entrepreneurial orientation has become a flourishing research field since it is widely advocated as a means of organizational innovation and has many advantages both at individual and organizational level. Entrepreneurial orientation and strategic management practices are combined in a empirical research investigating the influence of strategic management practices on entrepreneurial orientation of private sector commercial banks.

TQM Implementation and Its Effectiveness in Private Commercial Banks in Bangladesh

Total Quality Management (TQM) has a key role to make an effective, wellbeing finance and financial market. The main objective of the study is to investigate the TQM model implementation and its effectiveness in private commercial banks in Bangladesh. The study also finds out impact of TQM on organizational development, employee management and their job satisfaction and service improvement for customer from the private commercial banks. The study is imperial in nature. Data has been collected from the secondary source with an unstructured interview process. Then a model has been developed for justifying TQM implementation in the private commercial banking sector in Bangladesh. The study finds out that the banks which have used the TQM model are sustainable and profitable rather than those who are not using it. Finally, the study recommends some key suggestions for private commercial banks to implement the TQM model.

Factors Influencing the Performance of Commercial Banks: A Dynamic Panel Study on India

The article investigates the determinants of commercial banks’ performance in India over the period from 2000 to 2017 with special reference to the macroeconomic factors. Considering return on assets (ROA), return on equity (ROE) and net interest margin (NIM) as the measure of performance, we have chosen a panel of public and private sector commercial banks of our country. Taking some macro variables such as GDP, inflation and lending interest rate as the prime explanatory variables along with some bank-specific and macroeconomic control variables, first difference generalized method of moments (GMM) method has been applied to observe the impact of these macroeconomic factors on the performance of commercial banks. Results indicate that external variables significantly affect commercial banks’ performance and these findings remain unaltered with the sequential inclusion of all control variables. This work has immense importance to the bankers, planners and policymakers in shaping appropriate policy decisions for the commercial banks.

The Impact of Performance Assessment System on Employee Commitment: A Study among Executive Officers of State-Owned Commercial Banks in Sri Lanka

Performance management is a much broader and a complicated function of HR, as it encompasses activities such as joint goal setting, continuous progress review and frequent communication, feedback and coaching for improved performance, implementation of employee development programs and rewarding achievements. Performance management can be regarded as a systematic process by which the overall performance of an organization can be improved by improving the performance of individuals within a team framework. It is a means for promoting superior performance by communicating expectations, defining roles within a required competence framework, and establishing achievable benchmarks. As end results, the performance appraisal positively affects to the employee commitment and it will lead to achieving corporate objectives. However, there is a public opinion about a poor performance management system in public sector organizations. Accordingly, some researchers argue that performance management of public sector commercial banks is poorer than private sector commercial banks in the Sri Lankan context. Hence, this paper focuses on the assessment of the influence of the current performance management system adopted by major state-owned commercial banks on job commitment of their executive employees. The sample for this study was drawn from executive grade employees who are working at Peoples Bank and Bank of Ceylon and data were collected by using self-administrated questionnaire. Altogether 350 questionnaires were distributed by email and 208 completed questionnaires were taken in for final analysis. The PLS based SEM was employed to measure the impact of the exogenous variable on the endogenous variable based on the Smart PLS-3. The results revealed that among the set of determinants, career development, is the most significant determinant of employee commitments among executive officers of state-owned commercial banks in Sri Lanka. Further, it was revealed that, alignment with organizational goals, is the least significant determinant of employee commitments among executive officers of state-owned commercial banks in Sri Lanka.

Banks and their technology investment decision are aligned or not – an experience of Indian banks

Purpose The purpose of this study is to measure the impact of technology spend on bank profitability focusing on Indian public and private sector commercial banks. The study also assesses the longevity duration of impact for both public and private sector banks. The trade-off is created between the bank’s profitability and technology spent across four identified columns: increase product sales, reduce cost, enhance employee efficiency and optimally use existing resources. Design/methodology/approach The metrics of four columns converted to measurable 11 financial alarming indicators and impact is again checked on profitability indicator ROE. The data used for empirical analysis for the study are between the year 2003 and 2019, across 12 public and 15 private banks. The interface between technology spend and profitability is measured using panel vector autoregression (VAR) and panel vector error correction model (VECM) and further the link between 11 financial indicators and profitability measures is established using panel data analysis. Findings The study found that there is a mixed effect of technology spent on profitability and performance of Indian banks, where public sector banks were found to be more unstructured over private sector banks. The study advises the optimal technology spend strategies to gain enhanced productivity for banking business which are to name a few – planned technology reserves, customer awareness campaigns for products, robust employee-customer motivation policy and customized technologies aligned to existing infrastructure. Originality/value The data was original and extracted from the Reserve bank of India website and respective banks’ annual reports.

The Fourth Industrial Revolution and private commercial banks: the good, bad and ugly

PurposeThis study aims to assess how new and emerging technologies can contribute to achieving the financial goals of the private commercial banking sector in Bangladesh. It considers the perception among the top management about the Fourth Industrial Revolution (4IR) and further measures the readiness of private commercial banks (PCBs) to become resilient.Design/methodology/approachThis study attempts to measure the perception and readiness of the commercial banking sector because of the 4IR based on the stratified sampling method. The research is qualitative and selected PCBs listed in the Dhaka Stock Exchange. 4IR in the context of the banking sector in Bangladesh is a problem that has not been studied more clearly, intended to establish priorities, develop operational definitions and improve the final research design.FindingsThis research has identified a significant gap of study in the preparedness among the private commercial banking sector in Bangladesh to confront the 4IR while indicating the most significant risks and managerial insights. The findings show technologies will dramatically change the nature of work. Traditional system of banking from the branch will be shifting into banking from everywhere. Hence, digital products and services will foster value-driven business. The result of the study also states the readiness of the banking sector is in the preliminary stage and endorses some of the coping approaches.Research limitations/implicationsDifferent schools of thought regarding the role of the 4IR and its future consequences have been observed. The corporate sector in Bangladesh has an inclusive lack of understanding regarding the 4IR.Practical implicationsThe insights may provide directions to banking financial institutions of Bangladesh to thrive during the 4IR. This study is intended to assist policymakers, decision-makers and employees of PCBs to increase awareness and preparedness for future challenges that may appear from the 4IR where the 41 competitive PCBs play vital role in turning the fast emerging Bangladesh economy.Originality/valueThe contribution of this paper associates with academics and bankers to increase understanding of coping in the context of the escalating use of emerging technology-driven banking services within the PCBs in Bangladesh by determining perception and testing different forms of readiness including a variety of important outcomes such as risks.

The Impact of Talent Management on Non-managerial Employees’ Retention in the Private Commercial Banking Sector of Sri Lanka

The functioning and long term survival of any organizations highly depends on several factors. Attracting and retaining the best talented employees is a key factor to ensure the accomplishment of organizational goals. Nowadays, most of organizations pay little attention on the retention of employees than attracting them. As a significant determinant for achieving organization’s goals, this study is to discuss the impact of Talent management on Non managerial employee retention in private commercial banking sector, Western province of Sri Lanka. According to the previous studies researchers proved that generally private sector employees enjoy more financial and non-financial benefits rather than state sector banking employees. But employee retention in private commercial banking sector lower than state banking sector. This reason was root factor to study the employee retention in private commercial banking sector. Further this study was focused on Non managerial employees in private commercial banks since they are the drivers of daily operations of banks. Further, their employee turnover is greater than Managerial level employees. The main objective of this study is to investigate the impact of Talent management on Non managerial employee retention. The study problem is to identify the impact of Talent management on Non managerial employee retention in private commercial banking sector of Western province in Sri Lanka. The data were collected by distributing a structured questionnaire from the convenient select sample of 375 of non-managerial employees in private commercial banks, Western province of Sri Lanka. The data were presented and analyzed using SPSS version 20.0. The Pearson product movement correlation analysis and least square linear regression analysis analyzed the data over which the hypothesis were tested. The findings of the study indicated that Talent management function positively correlated with non-managerial employee retention in private commercial banks and based on study findings and previous literatures study concluded that Talent management is a significant factor that considerably effect on employee retention.

High Involvement Management Practices and Employees’ OCBs in Banking Sector of Pakistan

This study was designed to evaluate the impact of high involvement HRM practices (HIHRP) on employees’ organizational citizenship behaviors (OCBs) in the context of banking sector of Pakistan. OCBs is considered as an important construct to evaluate the contextual performance of employees. In case of banking sector professionals, it is a highly desired behavior and top management has a greater interest in evaluating contextual performance in addition to the task performance of employees. This study differentiates itself from previous studies by focusing on HIHRP rather than traditional HRM practices. The data was collected from 396 officers working in top six private sector commercial banks of Pakistan. A structured questionnaire was used to collect the data and all responses were recorded on Likert scale. The data was analyzed through correlation and regression analysis and demographic characteristics of the employees were also presented through descriptive statistical techniques. The results show that different types of HIHRP positively influences employees’ OCBs. This study has both theoretical and managerial contributions by empirically examining the relationship between high involvement HRM practices and OCBs in the context of banking sector of Pakistan. The results of this study will help the researchers to better understand the relationship between HRM practices employees’ positive behavioral outcomes like OCBs. In addition, it will also guide the decision makers in adjusting HRM practices to achieve desired behaviors.

دور تکنولوجیا المعلومات فی تحقیق جودة الخدمات المصرفیة الإلکترونیة بالجهاز المصرفی المصری من وجهة نظر العملاء (دراسة تطبیقیة على عملاء بنوک القطاع الخاص التجاریة العاملة فی صعید مصر)

استهدفت هذه الدراسة التعرف على دور تکنولوجيا العلومات في تحقيق جودة الخدمات المصرفية الإلکترونية من وجهة نظر العملاء، حيث تمثل مجتمع الدراسة في القطاع المصرفي المصري، وبالتحديد بنوک القطاع الخاص التجارية العاملة في صعيد مصر، کما تمثلت وحدة المعاينة في (العميل) وهو الفرد الذي تقدم له الخدمة أثناء تعامله مع البنوک محل الدراسة. حيث تم تحديد عينة طبقية عشوائية من مجتمع دراسة عدده غير محدد (کبير نسبيا)، وقد تم تحديد حجم العينة بناءا على الجداول الإحصائية، حيث بلغ حجم العينة المختارة (384) بدرجة ثقة 95%، ومستوى معنوية 5%. وقام الباحث بتوزيع قوائم الاستقصاء على البنوک محل الدراسة وفقا لأسلوب التوزيع المتناسب، وقد بلغ عدد القوائم المعادة إلى الباحث والصالحة للتحليل الإحصائي (316) قائمة استقصاء بنسبة استجابة 82.29 %، والتي تعد نسبة جيدة في مجال العلوم الاجتماعية. کما أسفر التحليل الإحصائي عن مجموعة من النتائج من أبرزها: وجود فروق معنوية ذات دلالة إحصائية في إدراک العملاء لأبعاد (جودة الخدمات المصرفية الإلکترونية بصورة إجمالية، الأمان في استخدام الخدمات المصرفية الإلکترونية) وذلک بالنسبة للمتغيرات الشخصية الأتية (المستوى التعليمي، بداية التعامل مع البنک)، وأن هناک فروق معنوية ذات دلالة إحصائية في إدراک العملاء بالبنوک محل الدراسة لأبعاد جودة الخدمات المصرفية الإلکترونية (سهولة الاستخدام، الأمان، السرية)، وذلک بالنسبة للمتغيرات الشخصية الأتية (العمر، المستوى التعليمي، بداية التعامل مع البنک)، کما أشارت نتائج الدراسة أيضا إلى أن عملاء البنوک محل الدراسة لا يختلفون في إدراکهم لأبعاد جودة الخدمات المصرفية الإلکترونية حسب متغير النوع (ذکر / أنثى). بناءا على النتائج التي تم التوصل إليها تم تقديم دلالات الدراسة، کما تم وضع مجموعة من التوصيات التي تساعد إدارة التسويق والعاملين في البنوک المصرية على تحسين جودة الخدمات المصرفية المقدمة للعملاء. Abstract: The study aimed to identify the role of information technology in achieving the quality of e-banking services from the point of view of customers. The study community is represented in the Egyptian banking sector, namely the private sector commercial banks operating in Upper Egypt. The sample size was determined according to the statistical tables. The sample size was (384) With a confidence level of 95% and a significant level of 5%. The researcher distributed the survey lists to the banks under study according to the proportionate distribution method. The number of lists returned to the researcher and valid for the statistical analysis reached (316) a questionnaire with a response rate of 82.29%, which is a good percentage in the field of social sciences. The results of the statistical analysis are as follows: Significant differences in customer perception of the dimensions of (E-banking quality in general, Security in the use of e-banking) for the following personal variables (educational level, beginning of dealing with the bank) , And that there are significant differences in the awareness of customers in the banks under study of the dimensions of the quality of electronic banking services (Ease of use, Safety, Confidentiality), in relation to the following personal variables (Age, Educational Level, Start dealing with the bank). The results of the study also indicated that there is no differences between customers in the study in their understanding of the dimensions of the quality of e-banking services by type variable (male / female). Based on the results reached, the study's semantics were presented and a set of recommendations were developed to help the marketing department and the employees of the Egyptian Banks to improve the quality of the banking services provided to the customers.

Factors Determining the Success of Pradhan Mantri MUDRA Yojana : A Study of North India

The present study was a primary data-based research work in which attempt was made to identify the determinants of Pradhan Mantri MUDRA Yojana. For this study, data were collected with the help of a designed questionnaire and the respondents for the study were branch managers, assistant managers, and other responsible employees of public and private sector commercial banks. A total of 161 questionnaires were filled, although we approached more than 480 respondents at their branch locations. The reliability and validity of the collected data were tested by employing Cronbach's alpha. Furthermore, the data were analyzed by employing exploratory factor analysis with the help of SPSS. The study found six determinants of success of PMMY, and these determinants are responsible for creating awareness in weaker sections about start-ups and job creator non-funded individuals. This scheme is suitable for both banks and borrowers because this scheme does not require any collateral. Therefore, it should be continued by the Central government as it is a very close substitute of the other loan schemes. The results of this study will be quite useful for the Government of India, commercial banks, and other financial institutions in the marketing of this scheme in disbursement of loans to the rural & urban unemployed and non-funded individuals.

COVID-19 Impact on NPLs in Corporate Sector - A study on Banking Industry of Pakistan

This empirical study explores the impact of COVID-19 on NPLs (Non-performing loans) of corporate sector in banking industry of Pakistan. In this research, dependent variable is Non-performing loans and independent variables are Repayment capacity, ROA, Macroeconomic factors and Nature of collateral. The paper used random sampling technique to collect the primary data which based on quantitative study, structured questionnaire contains 15 questions from the participants which is bank employees (credit officers, marketing persons, branch managers and area managers) from 30 branches of 4 commercial banks operating in the city of Karachi, Pakistan which categorized by a) Public Sector b) Specialized banks c) Private sector bank the major collected the data from the last category is Private sector commercial banks it have highest number of branches of bank which is National Bank of Pakistan, Habib Bank Limited, Bank Al-Habib and Bank Islami Pakistan Limited operating in the Karachi. The questionnaire was filled by 260 respondents that all are employees in different banks. Supplementary data was collected through the different articles, publications, surveys, researches, reports of economist and analyst papers. More specifically, the SPSS model used to draw the results. Selective descriptive statistics, Pearson correlation and Multiple Regression model technique were used to elaborate the significance and relationship between the variables affecting NPLs. The variables are used in the study such as ROA, repayment capacity, nature of collaterals and macro-economic factors (economic downturn and high interest rates). These variables are directly influences to the NPLs, while macro-economic are moderate significant variables. The result have found that various background the NPLs and also suggest the loan sanctioning procedure for the financial institution. The findings of the study shows that high interest rate is significant relationship with the NPLs and the other variables is insignificant to the NPLs.The paper also indicates the techniques of risk management which is adopted by the banks to diverse the risk of chances of loan default or in rise the NPLs.

The Effects of Corporate Governance, Corporate Social Responsibility, and Intellectual Capital Disclosure on the Sustainability of Banking Sector in Bangladesh

Sustainability is one of the most cornering issues for the current corporate world. Wide realization has been adapted by the major organizations where everybody endorses to do business in a long run, not just to maximizing the profit. Aiming to create better environment for the future generations, several steps has been taken by various local and international associations and bodies. The focus areas that ensure sustainable practice are intellectual capital disclosure, CSR expenditure, infrastructural asset, research and development expenses, corporate governance structure, green banking policy, financial development, environmental effects and many other factors. Firms are aware of maintaining these factors effectively to sustain in the market. Sustainability is a massive subject and various component are related with this major issue. Recently three of the components such as Corporate Governance, Corporate Social Responsibility and Intellectual Capital Disclosure has grabbed the major attention and maintained with an important manner. Private commercial banking sector is one of the most popular and growing sectors in Bangladesh. Due to high competition, to sustain in the market is difficult for those banks. As a turn out various components of sustainability are effectively maintained by the banks. This paper shows how CG, CSR and ICD affect the sustainable practice of the private commercial banking sector in Bangladesh. It also relates various components and shows ways to improve the sustainable practice in our current situation.