scholarly journals Management of NPA via Capital Adequacy Norms: Its Effect Upon The Profile of Indian Banks and Credit Deposit Ratio

2016 ◽  
Vol 3 (1) ◽  
pp. 62
Author(s):  
Ramesh Chandra Das ◽  
Arun Kumar Patra ◽  
Utpal Das
Keyword(s):  
Banking Sector ◽  
Capital Adequacy ◽  
Foreign Banks ◽  
Committee Report ◽  
Reform Agenda ◽  
Significance Levels ◽  
Back Ground ◽  
Indian Banks ◽  
Bank Group ◽  
Asset Quality

<div><p>The reform agenda in the financial as well as banking sector in the Indian economy was not only in the target of achieving profitable banking business but also to reduce the magnitude of banking funds locked in the bad debt account so that, among others, the real delivery of credit (the credit-deposit ratio) rises in overall fronts. The Narasimham Committee Report in respect of reducing magnitude of non- performing assets has been framed in line with the Basel Norm regarding the asset quality of the banks where capital adequacy ratio has been fixed for different banks to achieve within different time periods. The present study, under such a back ground, has been structured to examine the profile of all Scheduled Commercial Banks in all ranges of CRAR over time in aggregate and bank group specific and to measure degree of correlation of NPA-Deposit ratio with CRAR trends and Credit-Deposit Ratio in all ranges of CRAR and their significance levels for the time period 1995-96 to 2009-2010. It has been observed that there has been variation across banks in following the guidelines of the reform committee. SBI group and foreign banks have been performing well in this respect. There has been rising trend of the proportions of banks in the above 10 per cent range of CRAR. The NPA/D ratio and C-D ratio have been observed to be positively and negatively correlated respectively for the first three ranges of CRAR and reverse in the above 10 per cent range. The correlation between the NPA/D ratio and C-D ratio is negative and significant.</p></div>

scholarly journals Management of NPA via Capital Adequacy Norms

2014 ◽  
Vol 3 (1) ◽  
pp. 62-74
Author(s):  
Ramesh Das ◽  
Arun Kumar Patra ◽  
Utpal Das
Keyword(s):  
Banking Sector ◽  
Capital Adequacy ◽  
Foreign Banks ◽  
Committee Report ◽  
Reform Agenda ◽  
Significance Levels ◽  
Back Ground ◽  
Banking Business ◽  
Bank Group ◽  
Asset Quality

The reform agenda in the financial as well as banking sector in the Indian economy was not only in the target of achieving profitable banking business but also to reduce the magnitude of banking funds locked in the bad debt account so that, among others, the real delivery of credit (the credit-deposit ratio) rises in overall fronts. The Narasimham Committee Report in respect of reducing magnitude of non- performing assets has been framed in line with the Basel Norm regarding the asset quality of the banks where capital adequacy ratio has been fixed for different banks to achieve within different time periods. The present study, under such a back ground, has been structured to examine the profile of all Scheduled Commercial Banks in all ranges of CRAR over time in aggregate and bank group specific and to measure degree of correlation of NPA-Deposit ratio with CRAR trends and Credit-Deposit Ratio in all ranges of CRAR and their significance levels for the time period 1995-96 to 2009-2010. It has been observed that there has been variation across banks in following the guidelines of the reform committee. SBI group and foreign banks have been performing well in this respect. There has been rising trend of the proportions of banks in the above 10 per cent range of CRAR. The NPA/D ratio and C-D ratio have been observed to be positively and negatively correlated respectively for the first three ranges of CRAR and reverse in the above 10 per cent range. The correlation between the NPA/D ratio and C-D ratio is negative and significant.

STUDY OF CAMEL RATING SYSTEM IN BANKING SUPERVISION- A CASE STUDY OF NEPAL BANGLADESH BANK LTD

2018 ◽  
Vol 1 (3) ◽  
pp. 74-96
Author(s):  
Dr. S.U. Gawde ◽  
Prof.. Alekha Chandra Panda ◽  
Prof. Devyani Ingale
Keyword(s):  
Banking Sector ◽  
Capital Adequacy ◽  
Rating System ◽  
Financial Risks ◽  
Economic Activities ◽  
Effective Measure ◽  
Critical Elements ◽  
Financial Soundness ◽  
The Usa ◽  
Asset Quality

The banking sector  plays in important role in the country’s economy, acting as an intermediary to all industries. As the banking sector has a major impact on the economy as a whole. Performance evaluation of the banking sector is an effective measure and indicator to check the soundness of economic activities of an economy. Many methods are employed to analyse banking performance. One of the popular methods is the CAMELS framework, developed in the early 1970’s by federal regulators in the USA. The CAMELS rating system is based upon an evaluation of six critical elements of a financial institution’s operations: Capital adequacy, Asset quality, Management soundness, Earnings and profitability, Liquidity, and Sensitivity to market risk. Under this bank is required to enhance capital adequacy, strengthen asset quality, improve management, increase earnings, maintain liquidity, and reduce sensitivity to various financial risks. In the present study an attempt was made to evaluate the performance & financial soundness of NEPAL BANGLADESH BANK LTD using CAMEL approach. Quantitative parameters are computed and updated on a quarterly basis while in respect of the qualitative parameters the ratings / marks given at the time of previous on-site examination

Analysis of Financial Performance of Public Sector Banks in India: CAMEL

2020 ◽  
pp. 097674792096686
Author(s):  
Yudhvir Singh ◽  
Ram Milan
Keyword(s):  
Public Sector ◽  
Banking Sector ◽  
Positive Impact ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Factors Affecting ◽  
Public Sector Banks ◽  
The Government ◽  
And Performance ◽  
Asset Quality

Public sector banks have been merged by the government in the last few years. This is the rationale behind conducting this study. The purpose of this article is to determine the factors affecting the performance of public sector banks in India and the interrelationship between bank-specific determinants and performance of public sector banks. In this article, we shall analyse the financial data of all the public sector commercial banks for a period spread across 11 years (2009–2019); Capital adequacy, Assets quality, Management efficiency, Earning, and Liquidity (CAMEL) has been used as a performance determinant; system generalised method of moments (GMM) analysis has been used to find the effect of determinants on the performance measurement of public sector banks; and CCA (canonical correlation analysis) has been used to find the interrelationship between the bank-specific determinants and the performance of public sector banks. The finding has important implications in terms of performance in the banking sector. Certain limitations of this study are: It is based on secondary data. The study only covers the financial aspects and not the non-financial aspects. It is found that the asset quality is negatively related with performance of public sector banks. Liquidity and inflation are inversely related to performance of public sector banks in India. Capital adequacy is positively related with banks’ performance, but inversely related with banks’ interest margin. GDP growth has a significant positive impact on banks’ performance, but inversely related with banks’ interest income. Inflation rate is inversely related with banks’ performance. Banking sector reforms are insignificantly related with banks’ performance.

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.

Differentiating Adopters and Non-adopters of Smart Cards: Comparative Analysis of Public, Private and Foreign Sector Banks in India

2013 ◽  
Vol 38 (3) ◽  
pp. 67-78
Author(s):  
Kamalpreet Kaur ◽  
Mandeep Kaur
Keyword(s):  
Smart Card ◽  
Banking Sector ◽  
Smart Cards ◽  
Payment Systems ◽  
Progressive Development ◽  
Reserve Bank ◽  
Financing Pattern ◽  
Indian Banks ◽  
Asset Quality ◽  
Different Characteristics

Progressive development in the field of information technology (IT) has brought in remarkable changes in the products as well as methods of payment and settlement system in the banking sector. In India, various types of payment systems are functioning apart from the traditional payment systems where the instruments are physically exchanged and settled manually. Smart cards are a new form of retail payment instrument, installed to facilitate retail transactions through electronic means. In 1999, the Reserve Bank of India issued guidelines to the banks regarding introduction and usage of smart cards. Smart cards are currently being issued by several banks in India which have tied up with Financial Information Network and Operations Ltd. (FINO). The IDBI bank has introduced its smart card called MoneySmart; Corporation Bank has issued CorpSmart; and Bank of India has issued its e-purse cards. PNB, SBI, ABN Amro, ICICI Bank, Bank of Baroda and some other banks have also launched smart card-based banking solutions (Kaur & Kaur, 2008). The main objective of this study is to identify the factors that may vary between the adopters and the non-adopters of smart cards in Indian banks. Banks that have adopted the cards may have different characteristics from those that have not yet adopted the cards. In other words, with the exploration of various characteristics of the banks, the study tries to differentiate between the adopter and non-adopter categories of the banks regarding smart cards with respect to their profitability, size, competitive advantage, efficiency, asset quality, financing pattern, diversification, cost of operations, etc. The empirical results evidently reveal that the banks providing smart cards differ in their characteristics from that of the banks that have not yet adopted it. It shows that the banks that adopted smart cards are larger in size, more efficient, pay lesser wages, and have more industry advantage and thus, in terms of some characteristics, outperform the non-adopter banks.

Determinants of Bank Performance in a Developing Economy

2012 ◽  
Vol 13 (1) ◽  
pp. 1-23 ◽  
Author(s):  
Fadzlan Sufian ◽  
Mohamad Akbar Noor Mohamad Noor
Keyword(s):  
Banking Sector ◽  
External Factors ◽  
Foreign Banks ◽  
Bank Performance ◽  
Asian Countries ◽  
Network Embeddedness ◽  
Indian Banks ◽  
Internal And External Factors ◽  
The Impact ◽  
Global Advantage

The article seeks to examine the internal and external factors that influenced the performance of banks operating in the Indian banking sector during the period 2000–08. The empirical findings from this study suggest that credit risk, network embeddedness, operating expenses, liquidity and size have statistically significant impact on the profitability of Indian banks. However, the impact is not uniform across banks of different nations of origin. During the period under study, the empirical findings do not lend support for the ‘limited form’ of global advantage hypothesis. Likewise, the liability of unfamiliarness hypothesis is also rejected, since we do not find significant advantage accruing to foreign banks from other Asian countries.

scholarly journals Cross-border banking and foreign branch regulation in Europe

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lucia Gibilaro ◽  
Gianluca Mattarocci
Keyword(s):  
Banking Sector ◽  
Foreign Bank ◽  
Capital Adequacy ◽  
Foreign Banks ◽  
European Economic Area ◽  
The European Union ◽  
Content Type ◽  
Cross Border ◽  
European Banking

Purpose This paper aims to examine the relevance of cross-border activity in the European banking sector, evaluating the role of differences in regulation to explain the level of interest in entering foreign markets. Design/methodology/approach The sample considers all banks in the European Union (EU 28) existing at year-end 2017, and information about the ultimate owners’ nationality to classify local and foreign banks is collected. The analysis provides a mapping of regulatory restrictions for foreign banks and evaluates how they impact the role of foreign players in the deposit and lending markets. Findings Results show that the lower are the capital adequacy requirements, the higher are the amounts of loans and deposits offered by non-European Economic Area banks and, additionally, the higher the probability of having a foreign bank operating in the country. Originality/value This paper provides new evidence on regulatory arbitrage opportunities in the EU and outlines differences among EU countries not previously studied.

scholarly journals Performance evaluation using the CAMELS model: A comparative study of local commercial banks in Qatar and Kuwait

2021 ◽  
Vol 16 (3) ◽  
pp. 152-165
Author(s):  
Rawan Abuzarqa ◽  
◽  
Tibor Tarnóczi ◽  
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Financial Analysis ◽  
Banking System ◽  
Capital Adequacy ◽  
Accounting Data ◽  
Study Approach ◽  
Analysis Process ◽  
Two Factors ◽  
Asset Quality

Nowadays, the banking system is undergoing significant changes. Digitalization that appears in Industry 4.0 also pioneers in the banking system, so we can also talk about Bank 4.0 as a new development direction. In this shift in the digital age, it becomes even more critical to examine the performance of banks. The case study approach was based on an attempt to diagnose the performance of a sample of local commercial banks in Qatar and Kuwait based on their financial statements for the period 2013–2017, and approve the existing accounting data as sources for the financial analysis process, by using essential financial analysis tools such as financial ratios. The output of the analysis was used to measure performance. All this is applicable when using the CAMELS rating model to evaluate the financial performance of the banking sector. The results show statistically significant differences between countries for four factors (Asset quality, Management efficiency, Earnings quality and Sensitivity) and none for the remaining two (Capital adequacy and Liquidity management) because the significant level is higher than 5%. However, the two factors with no significant differences are vital to the prudent operation of banks, mainly that Qatari banks perform better than Kuwaiti banks.

scholarly journals Determinants Of Liquidity Risk In Banking Sector On The Indonesia Stock Exchange

2019 ◽  
Vol 23 (3) ◽  
pp. 461
Author(s):  
Susy Muchtar, Gianvha Sena Rustimulya
Keyword(s):  
Banking Sector ◽  
Stock Exchange ◽  
Liquidity Risk ◽  
Capital Adequacy ◽  
Economic Cycle ◽  
Capital Adequacy Ratio ◽  
Bank Managers ◽  
Negative Effect ◽  
Independent Variable ◽  
Asset Quality

This research aims to determine the factors that impact liquidity risk. The sample used in this research is a banking sector that is listed on the Indonesia Stock Exchange (IDX) in the period 2008-2017. Independent variable in this research bank size, deposits, profitability, cost of funds, asset quality, capital adequacy ratio, economic cycle, and inflation and the dependent variable is liquidity risk. The amount of the sample of the research amounted to 25 banking sector, by using purposive sampling. The result of this research indicates that bank size, profitability, cost of funds, and asset quality have a negative effect on liquidity risk, while deposits, capital adequacy ratio, economic cycle, and inflation have no impact on liquidity risk. The results of this study are expected to be used as a reference for bank managers and investors in looking at the factors that affect the liquidity risk in the banking industry.

scholarly journals Financial Sustainability Assessment of the Largest Systemically Important Credit Institutions in the Context of the Global Instability

2021 ◽  
Vol 12 (2) ◽  
pp. 10
Author(s):  
Oksana V. Savchina ◽  
Ekaterina A. Sidorina ◽  
Olga V. Savchina ◽  
Petr S. Shcherbachenko
Keyword(s):  
National Economy ◽  
Financial Stability ◽  
Banking Sector ◽  
Sustainability Assessment ◽  
Banking System ◽  
Capital Adequacy ◽  
Business Strategies ◽  
Financial Sustainability ◽  
Management Efficiency ◽  
Asset Quality

The national banking system is the driver for the national economy that unites various types of credit organizations that operate within a single monetary mechanism. The banking system is a part of the economic “organism”, whose condition determines the stable development of society. The problems that currently exist in the banking sector reflect instability of the entire economic situation in the country. The reasons are a reduction in budget support for organizations and the inability of some of them to adapt to changing external conditions. In crisis conditions, it is of particular interest to assess the financial sustainability of the activity of the largest systemically important banks in the country, which are the “circulatory system” of the national economy. This article assesses the financial stability of PJSC “Sberbank of Russia” based on an analysis of the main groups of its performance indicators for 2007-2019: capital adequacy, asset quality, management efficiency, profitability and liquidity. According to the research results, it is revealed that during the period under review, the activity of Sberbank is stable with respect to such indicators as capital adequacy, profitability, management efficiency and liquidity. Bank activity is unstable relative to asset quality indicators. The high value of the asset quality ratio characterizes the increased degree of riskiness of operations conducted. The ratio of overdue debt is above the norm, which adversely affects the financial stability of the bank. The most important achievement of Sberbank of Russia in 2019 - the launch of a new digital platform of the bank. The use of artificial intelligence technologies has already become an important driver of Sberbank business. Due to the pandemic of COVID-19, the Russian banking sector may face a number of problems. By 2021-2022, the growth is expected only by those banks that will build an effective risk management system and will be able to adapt their business strategies to the new economic realities and tougher requirements of the regulator.

Sign in / Sign up

Export Citation Format

Share Document