Scheduled Commercial Banks Research Articles

Board characteristics and bank performance in India

Using a sample of 36 scheduled commercial banks in India during the period of 2001–2014, we explore the impact of board structure characteristics such as board size, independence and CEO duality on bank performance. We find significant relationship between board size and bank performance when the board size is between 6 and 9. We also find positive and significant relationship between board independence and bank performance. Further, we find that the number of board meetings and a larger number of financial experts on the board are important for bank performance. However, we find no significant improvement in bank performance when the role of CEO and chairman is separated.

Non Performing Assets of the Indian Banking System: A Critical Evaluation

A healthy and a sound banking system is essential for an economy. The best indicator for the health of the banking industry in a country is its level of Non Performing Assets (NPAs). NPA has a direct impact on the profitability, liquidity and solvency of the bank. Burgeoning NPA has been one of the major glitches of Indian Banking System. Given the importance of NPA's for Indian Banking in the present paper we study Non Performing Assets of Indian Scheduled Commercial Banks. To understand the status of NPA in this paper we have Public Sector Banks, Private Sector Banks, Nationalized Banks, SBI Group, All Scheduled Commercial Banks. We have also projected the figures of Gross NPA of all Public Sector Bank, Nationalised Bank, SBI Group, Private Sector Bank, All Scheduled Commercial Bank.

An Empirical Analysis of Deposits Mobilization by the Scheduled Commercial Banks and Economic Growth: Evidence from India

An Empirical Analysis of Deposits Mobilization by the Scheduled Commercial Banks and Economic Growth: Evidence from India

Performance Evaluation of Private Commercial Banks of Bangladesh: A Trend Analysis

The study revealed the trend analysis of the private commercial banks and given an overview of the performance of private commercial banks of Bangladesh. Nowadays, the banking sector is the “lifeblood” of all economic activity. The study is empirical. To get the proper understanding about the trend of different variables such as, investment loan & advancement, total asset, total liability, total equity, profit after tax, return on investment, return on asset, and return on equity from 2013 to 2017 the sample was extracted from the scheduled commercial banks. The result shows that the banking system of Bangladesh is not running at a normal pace. The index of the various variable of PCBs has progressed in some years, but again it has been delayed for the next time. The ROI and the ROA result show the best output in 2014 and the worst in 2017. On the other side, the best return on equity shows in 2014, but it is in the lowest position in 2015 because of a sudden increase in an equity position. The trend of profit after tax is like a wave. In 2014 and 2016 it is increased than the last year. On the other hand, in 2013, 2015 & 2017 it is decreased in comparison to the previous year. The data shows that the PAT is rotated within 15,000 to 20000 million taka. It is studied that, the growth and development, as well as the performance trend, is not rhythmic. PCBs should get the proper rhythm of their development, and for the development of the state.

A Critical Study on Priority Sector Lending by Scheduled Commercial Banks in India

The present empirical study focuses on the lending of Scheduled Commercial banks towards the priority sector and its different segments. The research is based on secondary data for the period 2005 to 2015. The stress of the article is not just on the total priority sector but different segments in the category. Moreover, analysis is made on the lending performance of different groups of banks. The analysis of data shows that the growth is phenomenal for educational loans, loans to the MSE sector and agriculture apart from that towards the weaker sections. In contrast, the relative growth rate for housing and microcredit is comparatively far lower. A noteworthy aspect is that the state sponsored fund towards SCs and STs show a decline during the period. Moreover, the coefficient of variations shows no major variation around the mean for the different categories of loans. With regard to the groups of banks, it is seen that though the public sector plays a key role, the rate of growth in disbursement through the private sector banks surpasses those of the public sector. The inter-group mean comparison reveals a significant different among all the categories of banks.

Trends in Financial Development in India

Financial system bridges the gap between savers-investors and mobilises savings into productive and efficient avenues which leads to enhanced levels of economic growth. The present study was undertaken with the objective to examine the trends in financial development in terms of depth, access, efficiency and stability of the financial system in India during the time period 1991–92 to 2016–17. The depth of financial institutions, as well as financial markets, have shown significant improvement over the time period under study. Besides, access to the financial system also enhanced. However, when the growth of the financial system in India is observed in terms of efficiency, the picture is not very rosy, particularly in the case of profitability levels of scheduled commercial banks. Although there is an increase in profitability levels over the time period, this raise is very meagre. Financial system particularly financial markets have shown a volatile behaviour which adversely affected the stability of the financial system in India. This emphasises that policymakers should also concentrate on improving the efficiency and stability of the financial system to improve the levels of financial development in India.

Compound Annual Growth Rate of Credit Deposit Ratio of Schedule Commercial Banks

With the progress of the Indian economy, especially when the economy focuses on to achieve sustainable developments, there must be an attempt to include maximum number of participants from all the sections of the society. But lack of awareness and financial literacy among the rural population of the country is hiding the growth of the economy as a majority of the population does not have access to formal credit. financial inclusion as the process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low income groups at an affordable cost in a fair and transparent manner by mainstream institutional players This paper analyses the financial inclusion developments of schedule commercial banks in 36 (including union territories) Indian states in both rural and urban from the year 2015 to 2017. The paper concludes that, after 60 years of independence, a large section of Indian population still remains unbanked. This malaise has led generation of financial instability and pauperism among the lower income group who do not have access to financial products and services. Out of 36 states, including Manipur, Rajasthan, Haryana, Chhattisgarh, Chandigarh and Madhya Pradesh have high growth rate of banking penetration, where as Tripura, Delhi, Lakshadweep and Daman & Diu have low growth rate of banking penetration. The credit deposit ratio growth rate is highest in some states includes-West Bengal, Gujarat, Maharashtra, Mizoram and Chhattisgarh. However, in the recent years the government and Reserve Bank of India has been pushing the concept and idea of financial inclusion.

Financial Inclusion: An Analysis of Schedule Commercial Banks in India

With the progress of the Indian economy, especially when the economy focuses on to achieve sustainable developments, there must be an attempt to include maximum number of participants from all the sections of the society. But lack of awareness and financial literacy among the rural population of the country is hiding the growth of the economy as a majority of the population does not have access to formal credit. financial inclusion as the process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low income groups at an affordable cost in a fair and transparent manner by mainstream institutional players This paper analyses the financial inclusion developments of schedule commercial banks in 36 (including union territories) Indian states in both rural and urban from the year 2015 to 2017. The paper concludes that, after 60 years of independence, a large section of Indian population still remains unbanked. This malaise has led generation of financial instability and pauperism among the lower income group who do not have access to financial products and services. Out of 36 states, including Manipur, Rajasthan, Haryana, Chhattisgarh, Chandigarh and Madhya Pradesh have high growth rate of banking penetration, where as Tripura, Delhi, Lakshadweep and Daman and Diu have low growth rate of banking penetration. The credit deposit ratio growth rate is highest in some states includes-West Bengal, Gujarat, Maharashtra, Mizoram and Chhattisgarh. However, in the recent years the government and Reserve Bank of India has been pushing the concept and idea of financial inclusion.

Study on liquidity of Indian banks: an empirical analysis of scheduled commercial banks

Study on liquidity of Indian banks: an empirical analysis of scheduled commercial banks

Study on liquidity of Indian banks: an empirical analysis of scheduled commercial banks

We study the impact of profitability, net interest margin, non-performing assets, capital adequacy ratio, bank size, deposits and cost of funding on liquidity of Indian banks. To examine this relationship, we have taken annual data pertaining to 64 Indian banks from the period 2000 to 2014. Banks considered include all private, foreign and public sector banks operating in India from 2000 to 2014. Using fixed effect estimates, we find that capital adequacy ratio, deposits and profitability influence Indian bank liquidity positively while bank size, non-performing assets and net interest margin affect Indian bank liquidity negatively. Cost of funding does not affect liquidity of Indian banks significantly. Findings of our study have significant implications for bankers, policy makers and researchers advocating the relationship of liquidity and factors such as bank size, profitability, net interest margin, non-performing assets, capital adequacy ratio, cost of funding and deposits and highlighting the possible reason behind that. The study would help in appropriate policy formulation, decision making and maintaining adequate liquidity in the banking system.

Factors affecting environmental performance: evidence from banking sector in Bangladesh

Analysis of environmental impacts of production of goods or services helps assess environmental performance of any activity. This paper aims at determining the factors that influence environmental performance of banks in Bangladesh. Bank's Environmental Performance Score (EnPS) is calculated based on the Global Reporting Initiative (GRI) Sustainability Guidelines, 2002. All the necessary data are collected from the content analysis of the audited annual reports of 31 scheduled commercial banks for the financial year ending December 2012. Applying multiple regression technique this study finds that bank's credit rating score is positively related to EnPS, whereas premium in share price and bank's longevity in service are negatively associated with EnPS. Contrary to the common perception that a large and highly profitable bank would be environmentally more concerned, the result shows no such association between these variables. Policy-makers, therefore, may urge large and highly profitable banks to lead environmental initiatives towards green banking revolution in Bangladesh.

Factors affecting environmental performance: evidence from banking sector in Bangladesh

Analysis of environmental impacts of production of goods or services helps assess environmental performance of any activity. This paper aims at determining the factors that influence environmental performance of banks in Bangladesh. Bank's Environmental Performance Score (EnPS) is calculated based on the Global Reporting Initiative (GRI) Sustainability Guidelines, 2002. All the necessary data are collected from the content analysis of the audited annual reports of 31 scheduled commercial banks for the financial year ending December 2012. Applying multiple regression technique this study finds that bank's credit rating score is positively related to EnPS, whereas premium in share price and bank's longevity in service are negatively associated with EnPS. Contrary to the common perception that a large and highly profitable bank would be environmentally more concerned, the result shows no such association between these variables. Policy-makers, therefore, may urge large and highly profitable banks to lead environmental initiatives towards green banking revolution in Bangladesh.

An assessment of employment opportunities in the scheduled commercial banks since reforms period

As per the Report of the Narasimham Committee on Financial System (CFS) 1991, the Indian banking sector should be open for private and foreign banking institutions and allow them to operate their banking operations in the Indian banking industry. After these recommendations, the Government of India and Reserve Bank of India accepted the recommendations and implemented it in the Indian banking industry. Since then the Indian banking sectoropenedup for the private and foreign banking institutions. After the implementation of these reforms, the Indian banking sector enteredinto the world of acompetitive environment where they have to face the stiff competition from their new counterparts who recently entered into the Indian banking industry. This paper is attempted to examine the growth trends of employment in the Scheduled Commercial Banks since reforms period. It also examines the banking group wise employment per branches of the Scheduled Commercial Banksin India since reforms period.

Profitability drivers for Indian banks: a dynamic panel data analysis

The study aims to find the factors such as bank specific factors, banking industry factors and macroeconomic factors that affect bank profitability in India. The paper employs the data from Indian Public sector and Indian private sector banks for the period from 2006–2007 to 2012–2013. Both these banks contribute to more than 90% of total business of scheduled commercial banks in India. The study applies the dynamic panel data analysis. The dependent variables include return on average assets and return on equity, and independent variables include bank specific factors, banking industry factors, and economic factors. Among the bank specific factors, non performing loans and cost to income ratio negatively affects the bank profitability, and diversification measures do not affect the bank profitability.

Non-Performing Assets-A Study of Scheduled Commercial Banks in India

Banking sector is the back bone of nation’s economy. In India, banking sector is playing a vital role in economic development of by providing the required finance to various sectors. One of the primary functions of banks is lend money. Banks create credit to extend financial assistance in the form of business loans, agricultural loans, vehicle (automobile) loans, housing loans, personal loans etc. This lending process results credit risk to banks and then lead to non-performing assets (NPAs). These NPAs increase the carrying cost and adversely affect the profitability of banks and finally show negative impact on banks’ net worth. The present paper is aimed to study the performance of public sector in India with reference to their NPAs.

A Comparative Study of the Scheduled Commercial Banks of Meghalaya and India

Banking sector as a part of financial infrastructure of the economy facilitates mobilizing surplus funds from the public and channels it to finance both consumption and investment for deficit sector. Expansions of banking sector is an indicator of regional development. Several studies point out unequal banking facilities and unbanked/under banked areas in India reflecting disparities in financial infrastructure and hence regional growth. The present study aims to focus on the comparative scenario of scheduled commercial banks in India with reference to the State of Meghalaya on the basis of selected parameters viz. branch expansion, per office deposit & credit disbursed, credit-deposit ratio, per capita deposit & credit, and population served per branch. The study reveals that the state like Meghalaya is in disadvantaged position as compared to the national level. The author undertakes selected literature review related to the field and findings of the literature corroborate the observations of this research work.

Non-Performing Assets of Scheduled Commercial Banks in India:Its Regulatory Frame Work

Bank plays a vital role in the economic development and growth of a country. In a developing country like India, there is a need of efficient and healthy banking system. But from past few decades NPA has become a big threat for the growth of banking sector. In the present scenario, the core financial problem for banks is NPA. Proper recovery of loans can boost the performance of banks. Therefore, an attempt is made in this paper towards examining the effectiveness of NPA recovery measures. Selected recovery measures like Lok Adalat, Debt Recovery Tribunal and SARFAESI Act are taken to study the effectiveness of NPA recovery. From the study it is inferred that recovery of NPAs is still a measure concern for commercial banks in India. One of the reason for the poor recovery from NPAs is that, the mechanism created for this purpose are not effective that’s why banks are not able to derive full benefits from these.

Rising NPAs and Start Up India Initiative : A Possible Venture

The Indian banking sector has been facing serious problems of raising Non-Performing Assets (NPAs). The NPAs has a direct bearing on the growth and profitability of banks. The NPAs are one of the major concerns for scheduled commercial banks in India. Based on the recommendations of Narasimham committee and Verma committee, some steps have been taken to manage the NPA problem in the balance sheets of the banks. As such there was no unanimity in terms of the policies followed by various banking istitutions in resolving this problem. The figure of NPAs reflect the performance of banks. The banks unable to manage its high level of NPAs is reflective of large number of credit defaults that affect the profitability and net-worth of banks and also erodes the value of the asset. The NPAs not only affect the liquidity and profitability but also pose threat on quality of asset and survival of banks. The NPAs not only affects the profitibity of the banks but also affects the economy of the country. High level of NPAs as reflective in Indian banks is also a reflection of the state of health of the industry and trade. It is very much pertinant to reduce the NPAs in order to improve the financial health in the banking system. There may be various reasons for generation of these NPAs which may be due to improper assesment or fraud. This paper proposes a solution which in turn is also an start up India initiative to minimise the reasons for creation of these NPAs.

Cost, revenue and profit efficiency analysis of Indian scheduled commercial banks

PurposeThis paper aims to analyze the cost, revenue and profit efficiency performance of Indian scheduled commercial banks. The study also determines differences if any related to efficiency among banks on the basis of ownership pattern.Design/methodology/approachCost, revenue and profit efficiency of banks is calculated by using the non-parametric approach, namely, data envelopment analysis. Further, the differences in the efficiency scores are examined by applying analysis of variance.FindingsIndian scheduled commercial banks have not been able to maintain their input-output synchronization in terms of cost, revenue and profits in the year 2012-2013. Foreign sector banks have higher cost and profit efficiency as compared to their counterparts in private and public sector, whereas public sector banks are found to have been more revenue efficient.Originality/valueWith specific reference to India, less empirical work has been carried out with respect to cost, revenue and profit efficiency. None of the studies have evaluated the sector-wise performance of banks in terms of all three efficiency parameters.

Relative Performance Analysis of Scheduled Commercial Banks in India : A CAMEL Model Approach

For sustaining a healthy financial system, it is mandatory to analyze banks frequently for recognition of their strengths and removal of potential vulnerabilities. Banks act as fuel for smooth and efficient functioning of a nation's financial system. The purpose of the present study was to evaluate and compare the financial, operational, and managerial health of selected largest scheduled commercial banks in India with different ownership structure, such as public (State Bank of India), private (ICICI Bank), and foreign banks (Standard Chartered Bank). To achieve this objective, panel data was collected from authentic websites for the period from 2001-2002 to 2010-2011 for banks judged with globally accepted ratio based CAMEL model parameters and average of sub-parameters. In addition to this, one-way ANOVA (parametric test) was applied to statistically measure whether mean variance existed among these banks' ratios and performance. The findings revealed that these banks performed satisfactorily overall after the adoption of reforms. However, SBI was positioned at the top followed by SCB and ICICI Bank in India. Surprisingly, the study observed that there was no difference statistically among these banks in terms of ratios and performance of sub-parameters namely, debt/equity ratio, gross non-performing assets/total assets, income interest/total assets, and liquid assets to total deposits during the research. The study concluded that there was stiff competition among these banks and significantly recommended for proposed banking structure in India. In addition to this, SCB was found to be significantly more efficient during the research period in terms of doing profitable banking business and converting deposits into higher earning advances followed by ICICI Bank and State Bank of India (SBI).