scholarly journals Determinants of Systemic Risk of Banks in India

2019 ◽  
Vol 11 (1) ◽  
pp. 272
Author(s):  
Mihir Dash
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Systemic Risk ◽  
Fixed Effects ◽  
Capital Adequacy ◽  
Return On Assets ◽  
Book Value ◽  
Public Sector Banks ◽  
Interest Income ◽  
Systemic Impact

This study examines the determinants of systemic risk for banks in India. The independent variables considered for the study include the sector, bank size, return on assets, beta, leverage, capital adequacy, non-performing assets, price to book value, deposits, loans & advances, investments, net interest income, and non-interest income. A mixed panel regression model was applied, with bank fixed effects and year random effects.The results of the study indicate that public sector banks have a much higher level of systemic impact than private sector banks. Further, the determinants of systemic impact are different for public sector and private sector banks. The systemic impact of public sector banks was positively related with size and negatively related with price to book value ratio and investments to total assets ratio, while the systemic impact of private sector banks was negatively related with return on assets and positively related with beta and net interest income to total funds ratio.

An assessment of advertising effectiveness of Indian banks using Koyck model

2019 ◽  
Vol 16 (4) ◽  
pp. 498-512
Author(s):  
Ketan Mulchandani ◽  
Kalyani Mulchandani ◽  
Rekha Attri
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Advertising Effectiveness ◽  
Return On Assets ◽  
Content Type ◽  
Financial Measures ◽  
Operating Income ◽  
Public Sector Banks ◽  
Interest Income

Purpose The problem of differentiation and creating a unique selling proposition is higher in the banking sector, as, any new service or product introduced is very quickly imitated by the competitors. The benefits of advertising have been seen to have long-term effects on the firm’s performance and debate is still on whether the expenses of advertising should be amortized or expensed immediately has been the area of concern for many years. The purpose of this paper is to carry out a comparative analysis of advertising effectiveness on private and public sector banks in India. Design/methodology/approach This study has included 33 listed commercial banks out of 41 listed on S&P BSE 500. Out of 33 banks, 14 banks belong to private sector and 19 banks are public sector banks. Data are extracted for a period of 14 years from 2004 to 2017 from Ace Equity. In total, there are 462 firm-year observations. Interest income, operating income and return on assets are the accounting measures considered in this paper. All the variables are deflated by total assets at the beginning of the period. To assess the effect of advertising on financial measures, distributed lag model is used. Findings The results of Koyck model suggest that it takes lesser time for private sector banks to see a significant change in interest income and return on assets with a change in advertising expenses whereas in case of operating income, the results achieved are opposite. Originality/value This study may be useful from accounting point of view to find out whether advertising creates long-term or short-term impact on financial measures. The study would help in determining the number of years for which advertising expenses can be amortized. With the help of these results, it can be said that advertisement expenses can be capitalized and then expensed over coming years. This means, to some extent advertisement has some long-run impact on financial measures considered in the study. In order to achieve more robust results, this study can be performed on different sectors.

scholarly journals Capital Adequacy and Systemic Risk of Banks in India

2020 ◽  
Vol 12 (1) ◽  
pp. 1
Author(s):  
Mihir Dash
Keyword(s):  
Systemic Risk ◽  
Fixed Effects ◽  
Capital Adequacy ◽  
Panel Regression ◽  
Minimum Level ◽  
Moderator Variables ◽  
Minimum Capital ◽  
Fixed Effects Panel Regression ◽  
Systemic Impact

This study examines the role of capital adequacy in systemic risk for banks in India. The moderator variables considered for the study include bank size, non-performing assets, leverage, deposits, loans & advances, and investments. A fixed-effects panel regression model was applied, with bank fixed effects and year fixed effects.The study contributes to the literature by proposing the concept of minimum level of capital adequacy for neutral systemic risk, which is the level of capital adequacy for which the systemic risk is non-positive. The results of the study indicate that bank size, non-performing assets, leverage, and loans & advances have a significant impact on the minimum capital adequacy for neutral systemic risk. Further, the results of the study suggest that the role of capital adequacy in systemic impact was different for public sector and private sector banks.The study suggests that, instead of setting a fixed capital adequacy level for all banks, the model can be used to set capital adequacy targets for individual banks with estimates or projections of the bank’s characteristics. This can be used in conjunction with the Basel III framework in order to rationalise capital adequacy targets.

scholarly journals Camel Research of Selected Private and Public Sector Banks in India

2019 ◽  
Vol 8 (12) ◽  
pp. 1237-1248
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Capital Adequacy ◽  
Public Sector Banks ◽  
The People ◽  
Start Up ◽  
Private And Public ◽  
Financial Growth ◽  
Earning Quality ◽  
Asset Quality

Banks are the mainstay of any country’s economic development. The money is stored in the bank, wherein the people are risk free of keeping money at home, and whenever required can take their money. The banks also help for any business growth or any start up business. And to meet all this peoples’ requirement and even gain profits, banks sees their financial growth and analyze as what to be done to meet the requirements. Even the people should know, whether the bank in which they have gone on their money is stable and can give back their money back when needed or when the bank fails to shut down due to unavailability of assets or loss which cannot be reclaimed. This report examines the execution of certain private and public sector banks. Five banks from private sector viz. ICICI, HDFC, Axis, YES, Kotak Mahindra and five banks from public sector viz. SBI, PNB, BOB, UBI and Canara bank were chosen for this analysis. The data were collected for a period from 2012-2013 to 2016-2017 (5 years). CAMEL analysis (Capital adequacy, Asset quality, Management efficiency, Earning quality, and Liquidity) was applied towards assessing the performance. Based on CAMEL rating, HDFC & AXIS Bank are considered as performing above average; whereas PNB & Canara Bank is seen as below average. Thus, it could be concluded that in all the parameters of the CAMEL Model and its sub-parameters, the performance of the private sector is found to be better than the public sector. .

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

2019 ◽  
Vol 8 (6S4) ◽  
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Financial Performance ◽  
Capital Adequacy ◽  
Public And Private ◽  
Public Sector Banks ◽  
National Bank ◽  
Indian Banks ◽  
Public And Private Sector ◽  
Asset Quality

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.

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.

scholarly journals Customer Engagement with Social Media Bank Pages with Reference to Facebook

2019 ◽  
Vol 8 (2S11) ◽  
pp. 3089-3095
Keyword(s):  
Social Media ◽  
Public Sector ◽  
Private Sector ◽  
Banking Sector ◽  
Banking System ◽  
Customer Engagement ◽  
Public And Private ◽  
Public Sector Banks ◽  
Social Media Platforms ◽  
Public And Private Sector

Indian banking sector is going through a massive transformation day by day with the advancement of Information and communication Technology and impact of digitization in the banking industry. After the core banking system, banks have moved further to reap the benefits of internet and mobile banking. In order to engage more customers anywhere and anytime without visiting the brick and mortar branches, the banks have now introduced the social media banking. Most of the people are already active in different social media platforms, so banks have grabbed that opportunity to reach people easily and provide services through social media. This paper has made an attempt to analyze the engagement of social media customers in different banks including public and private sector with reference to facebook bank page. The results show that most of the banks have presence on popular social media platforms. With respect to the engagement of customer to all facebook posts during the study period, public sector banks are posting more on their respective facebook page but the customers’ likes as well as dislikes are more for SBI, ICICI and AXIS. In case of shares and comments, SBI and PNB have more and are increasing continuously as these two banks post more on their respective facebook pages. But with respect to customer engagement per facebook post during the study period, customers are engaged more with private sector banks. And it can be said that regarding overall customer engagement people are more engaged with private sector over public sector banks.

Performance Evaluation of Banks Sponsored Mutual Funds: An Analytical Study

Paradigm ◽  
2019 ◽  
Vol 23 (2) ◽  
pp. 197-218
Author(s):  
Meena Sharma ◽  
Manish Didwania ◽  
D. Suresh Kumar
Keyword(s):  
Performance Evaluation ◽  
Public Sector ◽  
Private Sector ◽  
Mutual Funds ◽  
Portfolio Management ◽  
Analytical Study ◽  
Comparative Performance ◽  
Public Sector Banks ◽  
Efficient Performance ◽  
Tax Savings

This research paper inspects the comparative performance evaluation of banks sponsored Indian mutual funds using traditional measure. The data comprises 166 open-ended equity, debt, liquid and equity linked saving schemes (tax savings) schemes during the period of April 2006–March 2017. The evidence shows that all sample schemes are well diversified. Public sector banks sponsored get first ranked because good return, all positive and diversified schemes and efficient performance of portfolio management as compared to Private sector and UTI banks sponsored mutual funds.

Decoding the Great Indian Recapitalisation Plan: Restoring the Health of Public Sector Banks in India

2019 ◽  
Vol 26 (1) ◽  
pp. 28-54
Author(s):  
Nikhil Garg
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Indian Government ◽  
Public Sector Banks ◽  
The Impact

Indian government has infused `250,000 million in the year 2016 and 2017 followed by `100,000 million within the year 2018 and 2019 with an inspiration of reducing the non-performing assets (NPAs) levels of public sector banks (PSBs). Figuring among the top 20 banks with the highest gross non-performing asset (GNPA) ratios, according to CARE Ratings’ analysis of the first quarter results of 38 banks, PSBs are more stressed than their private sector counterparts. On a quarter-on-quarter basis, the increase in NPAs has been the highest in Quarter 1 FY18 witnessing a rise of 16.6 per cent, achieving `8,293,380 million as of June 2017. This study is an effort to study the impact of NPAs, causes, suggestive measures and the need of recapitalisation of PSBs to tackle the crisis. It further suggests a standardised model which can help banks to keep in check of additional capital required for maintaining minimum CET 1 as per regulatory norms.

scholarly journals Bad Loans of Public Sector Banks in India: A Panel Data Study

2019 ◽  
Vol 5 (1) ◽  
pp. 22-30
Author(s):  
Kandela Ramesh
Keyword(s):  
Public Sector ◽  
Panel Data ◽  
Financial Stability ◽  
Random Effect ◽  
Random Effect Model ◽  
Negative Relationship ◽  
Banking System ◽  
Capital Adequacy ◽  
Public Sector Banks ◽  
Bad Loans

The soundness of the banking system is necessary for economic advancement and financial stability. In the contemporary era, the Indian banking system has suffered from the accumulation of substantial non-performing assets (NPAs), especially in the public sector banks (PSBs). This article examines the financial determinants of bad loans in the Indian PSBs with the help of panel data regression analysis. Panel dataset of 21 Indian PSBs for eight years from 2010 to 2017 is used for the study. For analysis, net non-performing assets (NNPAs) as a dependent variable and financial indicators as independent variable are used. Using the random effect model, it is found that credit–deposit ratio, loan maturity, and return on assets have a negative relationship with NNPAs. These factors have an association with a lower level of NPAs. Operating expenses and capital adequacy ratio have an insignificant effect on NNPAs. On the other hand, factors such as priority sector loans, collateral values, and non-interest income have a positive impact on NNPAs. These factors are an indication of a higher level of bad loans and are adding to the accumulation of NPAs in PSBs.

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