Private Sector Banks In India Research Articles

Profitability of Indian Public and Private sector Banks - Empirical Evidence

Banking sector reforms in the last 25 years has made the Indian banking sector vibrant and strong. Banking reforms rationalized banking system by opening new private sector banks, prudential norms for quality of asset, deregulation of interest rates and digital banking. Major players in Indian banking sector are the public sector banks. Study explores fundamental profitability determinants of public and private sector banks in India. The study selected eight banks each from public and private sector banks in India for eighteen years, from year 2000- 2001 to 2017- 2018.The Global banking benchmark on profitability, ROA is considered as the dependent variable. Bank specific, Industry level and Macro level Independent variables were analyzed to find out the fundamental variables significant to the profitability of banks in public and private sector. Study uses fixed effect and Pooled OLS model to explore fundamental variables determining the profitability.

‘ICT Supported Financial Inclusion for Inclusive Growth – for New Age Private Banks in India’

“Financial Inclusion is a delivery of Banking Services at an affordable cost to the vast sections of the disadvantaged and low income groups.” In this research work, an attempt has been made to have an insight into the different activities undertaken by the Government for the Financial Inclusion in India during the last few years. The programmes launched by some selected New Generation Private Sector Banks in India are also studied to know the present status of Financial Inclusion in India. It is a descriptive type of research work based on secondary data which has been collected from the web sites of the R.B.I., Ministry of Finance and the Banks selected for the study. The data related to the Financial Inclusion in India over the last 10 years has been considered for the research work. Financial Inclusion inculcates the savings habits among the people, saves the poor people from the vicious circle of debt from the informal sector.The New Age (Generation) Private Sector Banks are those which are established after 1993 under the new rules and regulations of R.B.I. These Banks have proved themselves as the most efficient Banks providing technology enabled Banking and Financial Services. ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, etc. are some of the examples of out of total 9 Banks of this type. The private Banks have been intentionally selected to know how much they are serious about the problem of financial exclusion and what efforts they are taking for the improvement of the deprived class of the society. Financial Inclusion is the key factor for the inclusive growth of the society. So as per the recommendations of the Khan Committee (2005). RBI issued guidelines to the Banks to extend their services to the unbanked areas through Business Correspondents with the help of ICT support. Pradhan Mantri Jan Dhan Yojana is playing an important role in the Financial Inclusion in the country. The National Digital Mission (NDLM) is working for the digital literacy among the people for improving their communication and accessibility to financial and other services. Attempts through various schemes like Zero Balance Account, Relaxation on KYC Norms, General Purpose Credit Cards, Easy Credit and Free Money Transfers, Financial Literacy Camps, Business Correspondents, Use of Technology, Branches in Unbanked and Rural Areas, etc. will definitely improve the financial condition of the people and it will boost the economic development of the nation. However, there is need to include more number of beneficiaries for the improved status of Financial Inclusion in the country.

SALES STRATEGIES OF BANKS: AN EMPIRICAL STUDY OF SELECT PRIVATE SECTOR BANKS IN INDIA

Intense competition in Indian banking industry compelled the bankers to involve in active selling. This paper aimed to identify the different sales strategies used in banks and to investigate the perceptual gap between employees and customers towards different sales strategies. Empirical study has been conducted among select private sector banks in the Barak valley region of Indian state of Assam. Perceptual gap has been analysed by estimating significance difference between two sample mean. Findings revealed that there is a significance difference between perception between employees and customers towards up-selling strategy whereas there is no such difference in case of other sales strategies. Study found that unique nature of the up selling strategy is responsible for creating such differences in perception. This study cannot be generalised in case of entire Indian banking industry as it focused only on the sales strategies of private sector banks in India. Findings help the banks to understand the gap between the thinking of employees and customers towards the importance of different sales strategies.

A Study on Investment and Return on Investment (ROI) on Social Media by Public Sector and Private Sector Banks in India

A Study on Investment and Return on Investment (ROI) on Social Media by Public Sector and Private Sector Banks in India

Impact Of Demonetization On The Economic Parameters That Affect The Growth Of Nonperforming Asset Of Indian Banks

The demonetization decision by the government of India affected almost all service sectors of Indian economy, out of which the banking sectors were affected the most. Due to demonetization bulk amount of old currency notes of INR 500 and INR 1000 were deposited to banks; that not only increased the capital base of banks, but those un-used cash boosted the liability of loan disbursement. Again the reducing interest rates, providing account opening facility and issuing loan to the depositors by banks without judging their repayment ability resulted a chance of increasing number of defaulters and the value of nonperforming assets. Considering the scenario the present research work tried to focus on the impact of demonetization towards the movement of nonperforming assets of Indian banks. A multivariate regression analysis was performed by considering income, expenditure and net profit ratio as internal and the percentage change of India’s GDP, inflation and foreign exchange rate as external independent variables towards the net nonperforming assets changes of Indian public and private sector banks as dependent variable from financial year 2016-17 to 2018-19. Though the outcome of the study revealed that demonetization helped to reduce the nonperforming asset values in short run but in long run it would stimulate the growth of nonperforming assets.

Non-performing assets in India: A critical analysis of public and private sector banks

The paper identifies and analyzes the causes that affect non performing assets (NPAs), hinder its effective observance, and recommends appropriate measures to ensure their effective monitoring and control. The banks selected for this research work are having higher NPAs and are top banks in their sector. As per the Global Financial Stability Report of International Monetary Fund (IMF, 2009), identifying and dealing with distressed assets, and recapitalizing weak but viable institutions and resolving failed institutions are stated as the two of the three important priorities which directly relate to NPAs. This research work finds the reasons for non-performing loans by considering a set of 50 variables and provides the necessary measures. Statistical tool SPSS was used to run the factor analysis test. Sectoral disparities in the NPA ratio to advances in public and private sector banks were the main source of motivation to analyze and compare factors affecting non-performing assets (NPAs) of public and private sector banks in India. Some of the reasons for NPA are lack of frequent interaction or follow-up with borrowers, manipulation of income or financial statement by borrowers, industrial problem and death of earning member of the family.

Assessing the efficiency of private sector banks in India: an empirical investigation using data envelope analysis

The present study looks into the technical efficiency of private banks in India for the years 2015-2016 to 2018-2019 using Data Envelopment Approach. The findings are based on three inputs, two outputs models under the assumption of a constant return scale. According to the Shapiro Wilk test, the test for normality shows that the distribution of efficiency scores follows a normal distribution. Further, the Friedman test reveals that there is a significant difference in efficiency scores between the four years. To get a more specific result by a pair-wise combination, Wilcoxon signed-rank test is applied. The Spearman rank correlation is tested to know the correlation between ranks according to business size and rank according to technical efficiency score. The overall analysis shows the dominant big private banks are efficient and with higher technical efficiency scores. The findings are interesting and also point to the scope of improvement for the different banks with low-efficiency scores.

Emerging trends and growth of banking frauds in India: a substantial obstacle in the pathway of sustainable development

The present research paper examines the increasing trends of fraud in the banking industry. The current research seeks to evaluate the growth and trends of fraud in the public sector and private sector banks in India. The image of the ugly part of the Indian banking system has been tried to analyse in the study. An overall picture of both the public and private banking sectors have been shown here in the research. The research also reveals the inter-sector comparative results from the perspective of fraud in both the sectors in the span of the last 15 years. The results of the study indicate that the public sector banks are suffering from this huge loss of amount due to fraud in banking activities. From the angle of economic growth, it is a huge setback for the whole monetary circle of the Indian economy. The results indicate that in both the sectors that are public sector and private sector banks, the increasing number of fraud cases is a big reason for increasing the amount which is involved in bank fraud cases.

The Human Challenges of the Digital World: The Paradigm of Employee Expectations in the Banking Sector

The Human Challenges of the Digital World: The Paradigm of Employee Expectations in the Banking Sector

Assessing efficiency of private sector banks in India: an empirical investigation using DEA

The present study looks into the technical efficiency of private banks in India for the years 2015-2016 to 2018-2019 using Data Envelopment Approach. The findings are based on three inputs, two outputs models under the assumption of a constant return scale. According to the Shapiro Wilk test, the test for normality shows that the distribution of efficiency scores follows a normal distribution. Further, the Friedman test reveals that there is a significant difference in efficiency scores between the four years. To get a more specific result by a pair-wise combination, Wilcoxon signed-rank test is applied. The Spearman rank correlation is tested to know the correlation between ranks according to business size and rank according to technical efficiency score. The overall analysis shows the dominant big private banks are efficient and with higher technical efficiency scores. The findings are interesting and also point to the scope of improvement for the different banks with low-efficiency scores.

Holistic Performance Assessment of Indian Private sector Banks: An Empirical Study with Multiple Model Approach

Banks play an important role in the economic growth of each country, especially private banks. This is the performance study of the three main private banks, namely listed on the National Stock Exchange (NSE), including the Bombay Stock Exchange (BSE). The financial measures are used for the statistical analysis of the performance of banks. Three key indicators, the performance of assets (ROA), Q model Tobin (price / book value), return on equity (ROE), an important performance ratio The data relating to the use by investors for the period from 2008 to 2018 selected banks. A multiple regression technique was used to identify the three indicators of financial performance, bank size, credit risk, asset management, operating efficiency and debt ratio. The results show that all selected measures have an impact on the financial performance of private commercial banks.

Effectiveness of Yield Measures on Performance and Profitability of Selected Banks in India

Productivity is one of the important measures which helps for growth and development of economy of the country. The productivity plays a crucial part in organizational achievement of excellence which is essential for dynamic society. Optimum productivity of a company depends on coordination between all inputs that yield maximum profitability with minimum effort. Hence the present study is focus on an objective of identify and compare the factors influencing the Productivity as well as Profitability Performance of select Public and Private sector banks in India. The sample consists of 20 Banks which were operating in India. The study period considered for the study is ten years from 2008-09 to 2017-18. The methodology which is used in the present study is Correlation analysis which helps to know the relationship between the select variables and Regression analysis is used to analyse the impact of select independent variables such as Sales Per employee, value added per employee, Profit before tax per employee, employee cost to sales and employee cost to value added on dependent variables like Return on Assets, Return on Equity and Value added per fixed assets. Further Independent sample test is used to assess the relationship between Productivity and Performance measures of select Public and Private sector Banks in India. Thus, the results from correlation analysis indicate that almost all the independent variables except Sales per employee and employee cost to sales have significant relationship with dependant variables in both Public sector and private sector banks. The Regression result shows that Sales per employee is having significant negative impact on Return on Assets, return on equity and Value added per fixed assets. Independent samples test reveals that the Private sector banks are showing superior performance than Public sector banks.

Modelling the Foreign Portfolio Investor Shareholding of Select Private Sector Banks in India

This paper projects a financial model involving key capital market financial variables such as FPI shareholding, Market Price, Earning Per Share (EPS), Price to Earnings Ratio (P/E Ratio), Book Value, Price to Book Value (P/B Ratio), Dividend Yield, Enterprise Value, Market Capitalisation, Beta, Net Profit and Operating Profit and determines the impact of these financial variables on the FPI shareholding of the Banks. The selected private banks include: Axis Bank Ltd., HDFC Bank Ltd., Kotak Mahindra Bank Ltd., Yes Bank Ltd. and ICICI Bank Ltd.The Study is based on 14 yearsQuarterly data from June 2005 to March 2019, obtained from secondary sources. The statistical tools used for the study are Analysis of Variance, Karl Pearson Coefficient of Correlation, Regression and Chi- Square Test for Goodness of Fit to test hypothesis of the study. The data was analysed using statistical packages for social sciences.Our study concludes that different financial variables impacted the FPI shareholding of each selected banks. It was also found that the model framed was a Good fit to the FPI shareholding of all the select banks.This model will help to estimate the future values of FPI shareholding of the selected banks provided the values of significant financial variable corresponding to the required period is known

Performance of the Indian Banking Sector – An Empirical Examination

A fundamental role of the banking sector in India is observed with regards to the social as well as economic development of the country. Sustainable economic growth can be achieved only if a healthy and robust banking system exists within the country. The banking sector’s performance is a closer link to the economy than perchance that of other segments. After nationalization of banks in 1969, a remarkable level of prominence as well as expansion of nationalized and public sector banks were witnessed and today the banking sector in India is well regulated and adequately capitalized. In recent years, there has also been tremendous growth and expansion in private banks in India. The current research aims at mapping the performance and financial health of banks based on basic parameters like income, expenditure, profit, loans, deposits and interest. Ratio analysis is used to scrutinize performance of the banks considered for the purpose of this study. T-Test has been used to establish the existence of any noteworthy difference between financial ratios of the considered Indian private and public sector banks.

The costs and benefits of going beyond the call of duty

PurposePast research has generally associated organizational citizenship behavior (OCB) with positive individual and organizational outcomes, paying little attention to its possible costs for individuals. Drawing from the conservation of resource theory (COR), the purpose of this paper is to address this gap by developing an integrative framework that simultaneously investigates the potential costs and benefits of OCB for individuals. In addition, the paper also investigates the down-streaming effects of OCB on workplace well-being (job satisfaction and affective commitment) favorably via psychological well-being and unfavorably via role overload.Design/methodology/approachA sample of 566 employees working in private sector banks in India was collected by using multi-stage random sampling approach. Structural equation modeling (SEM) was used to test the hypothesized relationships. Parallel mediation regression analysis was used for ascertaining the specific indirect effects of the two parallel mediators.FindingsResults indicate that OCBs targeted toward co-workers (OCBI), organization (OCBO) and customers (OCBC) were positively associated with psychological well-being. Simultaneously, OCBO was found to be positively associated with higher role overload. Further, psychological well-being and role overload mediated the effect of various dimensions of OCB on employees’ workplace well-being.Originality/valueThe study contributes to the existing literature by investigating both the beneficial and detrimental effects of various dimensions of OCB into one theoretical framework. By doing so, the study attempts to bridge the gap in the literature by linking these two divergent streams of research, i.e. whether OCB is beneficial or costly for individuals.

Effect of Foreign Direct Investment (FDI) Strategy on the Performance of Selected Private Sector Banks in India

In an accelerate changing economic condition, "Foreign Direct Investment" (FDI) has used as the catalyst for development in the most of growing nations including India. The FDI condition in India has experienced a radical change since the monetary changes in 1991. The positive changes can be especially ascribed to the developing arrangement system. The central purpose of the monetary segment changes has been the making of productive and stable budgetary foundations and advancement of the business sectors, particularly the cash and government protections advertise. Indian banks going worldwide and numerous worldwide banks setting up shops in India, the Indian financial framework is set to include into an absolutely new level it will help the financial framework develop in quality going into what's to come. The present investigation was led to look at the effect of outside direct speculation arrangement on efficiency of chose Indian private part banks during fourteen years from 2004-2005 to 2017-2018. The required information were gathered from optional sources like RBI Data-stockroom, Report on Patterns and Progress of Banking in India, IBA Bulletins, Journals, and Online databases. The compiled testimonies were dissected through inferential factual systems like Co-efficient of Correlation, T- distribution test and Analysis of Variance(ANOVA) with the assistance of statistical packages for social sciences(SPSS). The examination inferred that there is a noteworthy relationship among Total Advances to Total Deposits((TA2TD - dependent variable) and FDI, Staff and Expenditure(independent factors). Henceforth, it is prescribed that FDI in banking area ought to guarantee better capitalization and furthermore offer money related dependability in India

Managing sustainability in banking: extent of sustainable banking adaptations of banking sector in India

A healthy, robust and sustainable banking system is the key for achieving inclusive growth in Indian economy. This paper is aimed at determining the status quo of banking sector in India towards adoption of sustainable banking practices. The findings reveal that Indian banking industry has responded relatively slowly to sustainability issues. The public sector banks are more involved in addressing the social dimensions of sustainability through various microfinance schemes, gender-specific loan schemes, community development programme, etc., whereas the private sector banks in India have adopted relatively more comprehensive approach in addressing environmental care dimension like green building, ISO 14000 certification, innovative products and services, etc. They are more active in subscribing to the voluntary international guidelines and framework on sustainable development like UNEP FI, EPs, GRI, CDP, etc. For integrating sustainable banking, the Indian banking industry has to be more proactive in its approach and should adopt at least the established sustainable banking code of conducts.

Total rewards to enhance employees’ intention to stay: does perception of justice play any role?

PurposeThe purpose of this paper is to explore how total rewards might influence intention to stay among employees of private sector banks in India. A moderated-mediation mechanism is hypothesized, in which a system of total rewards leads to intention to stay via engagement and organizational justice (OJ) moderates the linkage of total rewards with engagement.Design/methodology/approachPerception of employees about the constructs considered has been assessed by a survey, using a structured questionnaire. Employees of private banks located in the State of Uttar Pradesh were the population for this study. A total of 17 branches of 7 private banks were covered, and the number of valid responses was 761. Hypotheses testing has been done with SPSS PROCESS command.FindingsHypotheses proposing mediation (engagement as mediator between total rewards and intention to stay), moderation (OJ as moderator between total rewards and engagement) and moderated mediation have found support.Practical implicationsResults obtained direct us to infer that in addition to the amount or value of any reward, aspects of OJ, such as equity and fairness in allocation of such reward and transparency in the procedure followed, are likely to influence the effectiveness of total rewards practices in engaging employees and motivating them to stay with their present employer.Originality/valueThis study adds to total rewards literature by highlighting how a total rewards system can lead to engagement, and consequently to employees’ intention to stay. Results establish OJ as an important attribute to any total rewards package to make the latter more valuable and effective.

Corporate Restructuring through Mergers: A Case of ICICI Bank

In the time of financial turbulence, corporate restructuring through mergers is one of the most prominent business strategies for corporates to achieve more significant market share, enhance profitability, expand its reach into the new markets, and also to obtain economies of scale. The objective of this study was to examine the impact of mergers on the short run market performance and long-run operating performance of ICICI Bank, one of the leading private sector banks in India. The present study distinguished itself from others by analyzing three essential measures simultaneously: (a) short run abnormal returns to shareholders, (b) long term operating performance of acquirer, and (c) strategic similarity analysis. Event study methodology, ratio analysis, and strategic similarity analysis were applied to study the short term and long-term performance of ICICI Bank. The findings revealed that the shareholders of ICICI Bank did not respond positively surrounding the announcement of its merger. However, the post-merger financial performance of ICICI Bank improved as was evident in its post-merger ratios and strategic similarity analysis. The Indian banking industry has witnessed a surge in consolidation activities through mergers and acquisitions. This study is rational in today's changing banking business environment to understand the value creation aspects of corporate restructuring moves primarily through mergers.

Financial Performance of Select Public and Private Sector Banks in India by using “Camel Model”

CAMEL model analysis is an important tool to analyse the banks’ and financial institutions’ performance and to suggest the necessary measures for its improvement where it is required. In the present study, Indian banks- five public and five private sector banks based on its total assets have been considered. This study is taken up for the five year period from 2012-17. The present study analyses the financial performance of the select banks. Five parameters of CAMEL- Capital Adequacy, Asset Quality, Management Efficiency, Earnings Ability and Liquidity are considered to rank the banks on its performance. The study found that Kotak Mahindra has performed better and ranked first among all the banks and Punjab National bank ranked the least position. Among all, private sector banks have outperformed compared to public sector banks. The top five positions are of private sector banks and Bank of Baroda being public sector bank ranked top third with HDFC bank.