Title: Banking sector in India
Name: Sonali Sathe
Literature Review
1. Nations with economic interest in India can take cognisance from the results. This is the first study to identify specific corporate governance determinants of asset quality for the Indian banking system using a dynamic panel data approach with data spanning over ten years from 45 banks.
2. With a paucity of climate-based and geospatial observational studies in South Asia, this paper (i) links power sectors and carbon dioxide emissions, (ii) maps nitrogen dioxide density across three countries (Pakistan, India, and Bangladesh), (iii) understands electricity generation trends and projects weather changes through 2100.The following databases were used: the International Energy Agency, the World Bank, the UN Food and Agricultural Organization.
3. To assess the quality of bank corporate governance, we used a non-parametric “Benefit-of-the-Doubt” (BoD) approach to create a bank-wise composite index of corporate governance based on 48 governance norms. Empirical results have shown that while Indian banks have made remarkable progress in adhering to the mostly mandatory corporate governance norms in the past few years, but their current level of governance isn’t adequate to characterize it as a “socially-efficient” structure.
4. A rapid expansion in the Indian financial sector has necessitated a growing focus on improving customer service which also includes the delivery of a robust Grievance Redressal Mechanism (GRM).This paper assesses the GRM policy content that is available on the website of 21 financial service providers in India.
5. India’s financial sector has faced many challenges in recent decades, with a large, negative, and persistent credit to GDP gap since 2012. We examine how cyclical financial conditions affect GDP growth using a growth-at-risk (GaR) approach and analyze the link between bank balance sheets, credit growth, and long-term growth using bank-level panel regressions for both public and private banks.The results indicate that higher credit growth, arising from better capitalized banks with lower NPLs, is associated with higher GDP growth.
6. The stages of economic- development model postulates that an emerging economy passes through a structural transformation process from a traditional agrarian structure to a service-sector oriented stage via the industrial stage. In this process, the bank-oriented and the market-oriented stages of financing are said to become complementary sources of finance from a substitutive role. Our empirical results suggest evidence from a disappearing role of substitutability into a complementarity between the two sources of finance in India for the period 1992-93 to 2018-19.
7. India introduced credit scoring technology in 2007. We study its adoption by the two main types of banks operating there: new private banks (NPBs) and state-owned public sector banks (PSBs). … We show that an important factor explaining the difference in adoption rates is the stickiness of past bank structures and managerial practices.
8. The present study compares the earnings management practices amongst the Indian private and public sector banks using the second digit test, one of the primary Benford law tests. Deposit turns out to be the most misreported financial figure for the private banks while public sector banks misrepresented loans and advances the most. Overall, the public sector banks seem to be more into rounding up behaviour as compared to the private banks.
9. Findings – The study shows that CDSs are still in their infancy in India. Banks are the primary market makers and users in the Indian CDSs market; therefore, regulatory authorities must assist them to boost the market. For banks to become more confident, they should gain experience and knowledge from other active CDSs markets around the world.Further, this study suggests approaches for the Indian banking sector to play an active role in the Indian CDSs market.
10. This paper analyzed the association between bank and capital markets financial development with income per capita in three regions; ASEAN-5 economies (Singapore, Malaysia, Thailand, Philippines, Indonesia), Asia-5 (Japan, China, Hong Kong SAR, South Korea, and India), and OECD-7 (Australia, Canada, Denmark, Norway, Sweden, UK, and US) from 2000 to 2017 using panel data regressions. A key lesson ASEAN-5 can learn from Asia-5 and OECD-7 experience is that bank size does matter despite digital disruptions to their banking system; yet large financial structure that favors banks is negatively associated with Asia-5, and importantly, efficient banking system (not bank size alone) is positively associated with OECD-7 income per capita. The finding has practical policy implications for ASEAN-5’s financial sector liberalization programs that impact the depth, breadth, and efficiency of banks and capital markets.
Conclusion: The finding has practical policy implications for ASEAN-5’s financial sector liberalization programs that impact the depth, breadth, and efficiency of banks and capital markets.
Reference:
1. Prashant Kumar Gupta & Seema Sharma (2022): Corporate governance determinants of asset quality in an emerging economy: evidence from Indian banks
2. Faiqa Falak & Farsom Ayub & Zunaira Zahid & Zouina Sarfraz & Azza Sarfraz & Karla Robles-Velasco & Ivan Cherrez-Ojeda (2022): Indicators of Climate Change, Geospatial and Analytical Mapping of Trends in India, Pakistan and Bangladesh: An Observational Study
3. Gulati, Rachita (2022): Bank ownership and governance quality in India: Evolution and detection of convergence clubs
4. Balasubramaniam, Vimal & Sane, Renuka & Sarah, Mithila & Karthik Suresh (2022): Do Indian financial firms have a robust Grievance Redress Framework in place?
5. Ms. TengTeng Xu & Ms. Margaux MacDonald (2022): Financial Sector and Economic Growth in India
6. Subrahmanyam Ganti & Kalluru Siva Reddy (2022): Banks, Financial Markets and Economic Development: some evidence for India by
7. Prachi Mishra & Nagpurnanand Prabhala & Raghuram G Rajan (2022): The Relationship Dilemma: Why Do Banks Differ in the Pace at Which They Adopt New Technology?
[Banking the unbanked: Measuring the success of JDY]
8. Vijyapu Prasanna Kumar & Sujata Kar (2022): Financial reporting quality of private and public banks in India
9. Tabassum & Mohammad Yameen (2022): Credit default swaps (CDSs): an effective tool to manage credit risk of Indian banks
10. Swee Liang Tan (2022): What, Why, and How Financial Development Matters: Evidence of ASEAN-5, Asia-5 and OECD-7 Economies