Investigating the Impact of the Announcement of Loan Moratorium on Stock Prices: Evidence from Indian Public Sector Banks

2020 ◽  
Vol 9 (2) ◽  
pp. 106-116
Author(s):  
Animesh Bhattacharjee ◽  
Madhu Kumari ◽  
Joy Das
Keyword(s):  
Public Sector ◽  
Stock Prices ◽  
Market Model ◽  
Index Model ◽  
Chambers Of Commerce ◽  
Reserve Bank ◽  
Bank Stock ◽  
The Government ◽  
The Impact ◽  
Reserve Bank Of India

The present article applies event study methodology in an attempt to investigate the impact of the announcement of 3-month moratorium by Reserve Bank of India on Indian public sector bank equity returns. For the present study, the estimation period is considered to be 120 trading days while the event window is considered to be 21 trading days. To compute the expected returns, the study uses a single-index model or the market model proposed by Fama [Fama, E., 1976. Foundations of finance. Basic Books]. The findings of the study suggest that the market responded to the news relating to the liquidity infusion by the Reserve Bank of India, falling global indices, development of potential coronavirus vaccine, and the announcement of 3 weeks period lockdown. The study further concluded that the market anticipated that the government may announce loan moratorium since industry bodies like The Associated Chambers of Commerce and Industry of India and The Federation of Indian Chambers of Commerce and Industry have recommended loan moratorium in order to safeguard the business enterprises especially the micro-, small- and medium-enterprise sector. Thus, the adjustment in the bank stock prices occurred before the announcement of the 3-month loan moratorium and as a consequence the average annual return on day ED-0 is found to be insignificant.

scholarly journals Public Sector Banks in India : Growth of NPAs and Restructuring Aspects

2021 ◽  
pp. 368-381
Author(s):  
Parmod K Sharma ◽  
Dr. Babli Dhiman
Keyword(s):  
Public Sector ◽  
Top Management ◽  
Regulatory Capital ◽  
Too Big To Fail ◽  
Public Sector Banks ◽  
Administrative Control ◽  
Reserve Bank ◽  
Stake Holder ◽  
The Government ◽  
Reserve Bank Of India

The recent restructuring of Public Sector Banks (PSBs) has generated immense interest in the economic world and the various stakeholders which include investors, depositors, borrowers, the staff working in these banks and the top management of the merging entities. Whereas the depositors look for safety of their monies, the borrowers of merging entities look for new loan products at cheaper rates and faster delivery. The investors will look for resumption of dividend payouts at higher rates and capital appreciation of their investments and the staff looks for better working conditions. The top management will expect more freedom to operate and manage their respective banks more efficiently to grow and earn higher profits. The merger of strong banks was recommended by the first Narasimham Committee in 1991. It has taken almost 28 long years for the Government of India to act on this very critical suggestion of the committee. It is widely believed that this belated step has been initiated due to huge pile of Non Performing Assets (NPAs) with Public Sector Banks and the resultant need for their frequent recapitalization. It is a moral hazard and bad economics for any government to regularly recapitalise PSBs being the major stake holder and having total administrative control of their boards and the top management. To enable PSBs meet the regulatory capital as per international norms and the provisioning requirements enforced by Reserve Bank of India, use of tax payer’s money (collected for economic development of the country) is questionable. However it is made clear by the government that the merger is intended to make PSBs bigger and internationally competitive and to build up their capacity to access capital markets for raising resources. A perspective of growth of NPAs and the resultant impact on the financial  deterioration of PSBs over a time horizon can give answers to the need for restructuring of Public Sector Banks as repeat of such actions by the government may again be necessitated in future. The improvement in financial performance parameters of PSBs over next few years will answer if act of restructuring by the Government of India results  in  internationally strong ‘too big to fail banks’ .

scholarly journals Review of Initiatives taken by the Government and the Banking Regulator for Successful Transition to a Financially Inclusive Economy: An Empirical Study of India

2019 ◽  
Vol 52 (1) ◽  
pp. 81-96
Author(s):  
Reena Agrawal
Keyword(s):  
Financial Inclusion ◽  
Payment Systems ◽  
Digital Revolution ◽  
Successful Transition ◽  
Direct Benefits ◽  
Payment Instruments ◽  
Reserve Bank ◽  
The Government ◽  
The Impact ◽  
Reserve Bank Of India

The current study was taken up to review the initiatives taken by the Government of India and Reserve Bank of India to promote financial inclusion in India. The aim was also to study the impact of these initiatives on the financial inclusion. The paper also intended to explore the impact of increasing penetration of mobile phone and internet on financial inclusion. The study revealed that government initiatives like Pradhan Mantri Jan Dhan Yojana, Aadhar Enabled Payment Systems and Direct Benefits Transfer; regulatory reforms by Reserve Bank of India such as Immediate Payment Service, Prepaid Payment Instruments, differentiated banks; digital revolution and active participation of private technology companies, are facilitating in successful transition into a financially inclusive economy.

Theoretical Application of Public Sector Planning and Budgeting

2018 ◽  
pp. 248-279
Author(s):  
Caroline E. Covell
Keyword(s):  
Public Sector ◽  
Social Exclusion ◽  
Negative Impact ◽  
Holistic Approach ◽  
Government Structure ◽  
The Public ◽  
Scientific Analysis ◽  
The Government ◽  
Theoretical Application ◽  
The Impact

The corporatization of the government has resulted in the change of the government structure and it has a negative impact on the fiscal budgeting. This change has also resulted in the equalization and generalization of the public-sector finance to private-sector finance. The impact is the disappearance of sources of funds and the adoption of the four-legged horse budget apocalypse and the categorical funding. This adoption has resulted in economic marginalization, social exclusion, massive corruption, and non-sustainability. A sustainable fiscal budget design requires the application of theory on practice and a holistic approach through the organizational structure and the timeframe of each jurisdiction, based on factual evidence and scientific analysis.

Marketing of Banking Services in India

2017 ◽  
pp. 107-133
Author(s):  
Rakhi Arora
Keyword(s):  
Banking Sector ◽  
Technological Development ◽  
Banking System ◽  
Foreign Banks ◽  
Indian Society ◽  
Reserve Bank ◽  
Nationalised Banks ◽  
The Government ◽  
Indian Banks ◽  
Reserve Bank Of India

Banking sector plays an important role in Indian Financial Sector.It has a long history that has gone through various stages of development after Liberalization, Privatization, and Globalization (LPG) has taken place. The Indian banking sector is broadly classified into scheduled banks and non-scheduled banks. The scheduled banks are those included under the 2nd Schedule of the Reserve Bank of India Act, 1934. The scheduled banks are further classified into: nationalised banks; State Bank of India and its associates; Regional Rural Banks (RRBs); foreign banks; and other Indian private sector banks, which are controlled and governed by Reserve Bank of India (Central Bank of India) and Ministry of Finance. In this era, the government has issued licenses to the new entrants to establish new banks to serve the Indian society. This chapter focuses on to show the various undergone phases of Indian banking system, growth of deposits and credits, technological development in Indian banking sector, services provided by the Indian banks, benefits and challenges faced by the Indian banks.

India’s remedy for bad debt may not bring relief

2017 ◽  
Keyword(s):  
Prime Minister ◽  
Banking System ◽  
Job Creation ◽  
Bank Credit ◽  
Content Type ◽  
Reserve Bank ◽  
Bankruptcy Code ◽  
The Government ◽  
Bad Debt ◽  
Reserve Bank Of India

Subject Implementation of India's new Insolvency and Bankruptcy Code. Significance Shrinking bank credit is hindering India’s ability to finance spending. The Reserve Bank of India (RBI) is relying on the recently instituted Insolvency and Bankruptcy Code (IBC) as the principal instrument to address the problem of stressed assets in the banking system. Impacts The government may accelerate plans to merge stronger and weaker PSBs. Indian corporates may increase their issue of bonds denominated in domestic currency. Prime Minister Narendra Modi will emphasise job creation rather than investment until the next election.

Insider trading surrounding securities class action litigation and settlement announcements

2017 ◽  
Vol 43 (1) ◽  
pp. 124-140 ◽  
Author(s):  
Frederick Davis ◽  
Behzad Taghipour ◽  
Thomas J. Walker
Keyword(s):  
Insider Trading ◽  
Private Information ◽  
Stock Prices ◽  
Class Action ◽  
Market Model ◽  
Trading Activity ◽  
Content Type ◽  
Sarbanes Oxley ◽  
Abnormal Profits ◽  
The Impact

Purpose The purpose of this paper is to investigate the trading patterns of corporate insiders, both managing and non-managing, around the announcement dates of securities class action lawsuits and related legal settlements. Design/methodology/approach The authors use market model event study methodology to examine the impact of class action litigation and settlement announcements on the stock prices of sued firms. The authors then determine the extent of abnormal insider trading surrounding such announcements by comparing insider trading activity (volume and transaction counts) to prior insider trading in the same firm, and to a matched sample of firms not experiencing such litigation announcements. A multivariate framework is utilized to provide further insight into the determinants of such abnormal insider trading. Findings The authors establish that class action litigation and settlement announcements have a significant impact on the stock prices of sued firms, and that foreknowledge of these events appears to be used by insiders to earn abnormal profits. Moreover, results indicate that managing insiders exhibit higher opportunistic abnormal trading activity than non-managing insiders. Multivariate analysis shows that size, prior firm returns, and the implementation of the Sarbanes-Oxley Act are important determinants of such insider trading. Originality/value This appears to be the first paper to analyze insider trading surrounding class action settlement announcements, and raises concerns about the ethical conduct of certain insider groups while highlighting the importance of access to private information, even amongst insiders themselves.

scholarly journals Fiscal Policy Shocks and the Dynamics of Asset Prices in Turkey

2015 ◽  
Author(s):  
Evrim Tören ◽  
Mehmet Balcılar
Keyword(s):  
Fiscal Policy ◽  
Stock Prices ◽  
Asset Prices ◽  
Housing Prices ◽  
Banking System ◽  
Asset Markets ◽  
Important Relationship ◽  
Policy Shocks ◽  
The Government ◽  
The Impact

Asset markets and the asset prices affect financial institutions, consumers, producers and policy makers while they are making decisions. There is an important relationship not only between the financial market and banking system but also between the housing market and the credit market. Therefore, the study analyzes the impact of fiscal policy on asset prices by using beyasian vector autoregressive models. The sample data has been gathered from the Central Bank of the Republic of Turkey. The aim is to demonstrate the effects of fiscal policy shocks on stock prices and housing prices. The data covers the period between 1988:Q1 and 2014:Q2. Overall, the results confirm that the spending shocks coming from fiscal policy have a greater influence on the stock prices. In addition, the government revenue shocks are more influential on the house prices compared to the stock prices in Turkey.

scholarly journals Motivational Factors and Job Performance: The Mediating Roles of Employee Engagement

2021 ◽  
Vol 11 (3) ◽  
pp. 67
Author(s):  
Hussain Almawali ◽  
Nor Intan Adha Hafit ◽  
Narehan Hassan
Keyword(s):  
Public Sector ◽  
Job Performance ◽  
Employee Engagement ◽  
Motivational Factors ◽  
Future Research ◽  
Ministry Of Education ◽  
Government Sector ◽  
The Government ◽  
The Impact ◽  
The Relationship

This research examines the relationship between motivational factors, job performance, employee engagement and the impact of motivational factors on job performance function of employee engagement as a mediator in the government sector in the Sultanate of Oman. A quantitative study methodology was used, and six hypotheses were evaluated using 111 representative government employees from the Ministry of Education. This study is a pilot test. This study uses quota sampling, and Statistical Package for the Social Sciences (SPSS) and path analysis techniques were used for the analysis. The study's findings indicate that these factors have a favorable association, that motivational factors have significant positive relationships with employee engagement and job performance, and that employee engagement acts as a partial mediator in the relationship between motivational factors and job performance. This study is critical for leaders and regulators interested in enhancing job performance in Oman's public sector. This is one of the few studies on the mediating function of employee engagement in the link between motivational variables and job performance. This is the first research of its kind in Oman for the public sector. Other motivational variables could be examined and evaluated in the private sector in Future research.

scholarly journals BANKING SECTOR ORIENTED FINANCIAL INCLUSION IN INDIA: A LONG TERM PERSPECTIVE

2020 ◽  
pp. 42-59
Author(s):  
Sana Pathan ◽  
Archana Fulwari
Keyword(s):  
Financial Services ◽  
Banking Sector ◽  
Financial Inclusion ◽  
Inclusive Growth ◽  
Long Run ◽  
Reserve Bank ◽  
The Government ◽  
Improve Access ◽  
Reserve Bank Of India

Financial Inclusion is an emerging concept. The objective of the government behind 100 percent Financial Inclusion is to have inclusive growth in India. Several initiatives have been taken by the Government of India and the Reserve Bank of India to improve access to financial services. To measure the effectiveness of these initiatives there is need to measure the extent of Financial Inclusion. Financial Inclusion can be measured by gauging the progress in access to and usage of a range of products and services of financial institutions over time. The present study sought to propose an index to measure the extent of banking sector oriented Financial Inclusion in India over a period of time rather than a cross-section study which has been the focus of many a studies. The study used more specific indicators of banks-centric financial inclusion dimensions to gauge the long run trend in Financial Inclusion in India. The results indicate that there is much improvement in Financial Inclusion in India since the implementation of financial sector reforms.

scholarly journals Crisis Management in Nigeria’s Public Sector and the Impact of the Organised Labour Union: Interrogating the Nexus between Industrial Harmony and Political Stability

2020 ◽  
Author(s):  
Daniel Taye Medoye
Keyword(s):  
Public Sector ◽  
Crisis Management ◽  
Social Groups ◽  
Political Stability ◽  
Sources Of Information ◽  
The Public ◽  
The Government ◽  
The Right ◽  
The Impact ◽  
Two Sectors

This study sought to explore the dynamics in managing crisis in the Nigerian public sector and its engagement with the organised labour, with a view to determining the interface between industrial harmony and political stability in the country. This study is predicated on the fact that crisis management is essentially embedded in humanity. Additionally, the study was informed by the established and widely held view by scholars, that social groups by their nature and context, are in fact characterised by conflicts. Consequently, the study established that the public sector in every society is not immune against conflict or crisis, and this will naturally arise as long as there is interaction between and among human elements in the two sectors. The author used the terms—crisis and conflict—interchangeably in the study, and pointed out that the methodology adopted was a descriptive and analytical approach. This is informed by the sources of information accessed which are essentially secondary. The study concluded by asserting that given the humanity-linked nature of conflict, its management in the public sector, particularly in Nigeria, will continue to be an unavoidable responsibility of the government. This is to ensure that the right environment is created to guarantee smooth governance.

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