Title: Calculation of Beta of Maharashtra Bank & its Significant.
Author: Mansi Dinesh Bendal
Introduction:
Bank of Maharashtra (BoM) was registered on September 16, 1935 with a capital of Rs10 Lakh. Today it has the largest network of 1,375 branches than any other public sector banks in Maharashtra . It has a network of 345 ATMs. BoM has tie up LIC of India and United India Insurance Company.
Objective: Relationship of Maharashtra Bank with Nifty.
Literature review:
1. Efficiency Of Urban Cooperative Banks Of Maharashtra:
The cooperative banking sector in India has received a series of shocks in recent years, resulting in a significant number of bank failures and upsurge in bank merger activities, both voluntary and arranged by RBI. The major legislative and regulatory changes raise a number of important questions about the sector, and issues of bank efficiency become more important as inefficient banks may not survive long; Geeta Sharma & Ganesh Kawadia (2006).
2. e Case of Punjab and Maharashtra Co-operative Bank (PMC Bank) India:
The trust of depositors in the Indian banking system was shaken in September 2019 when the five-page confession letter written by Joy K Thomas, Managing Director and Chief Executive Officer of Punjab and Maharashtra Co-operative Bank (PMC Bank), one of the ten largest co-operative banks in India revealed gross financial irregularities, collusion and fraud in banking operations of PMC Bank from 2008 onwards; Ambuj Gupta, (2021).
Data collection:
Data was collected from yahoo finance 01/04/2022 to 31/03/2023. Then data was manipulated from Friday closing price. We found the weekly returns of nifty fifty X and weekly return of Maharashtra bank is Y. Y was regressed on X.
Data analysis:
N = 51
R2 = 0.568872866
F = 64.65556953
Significance amount = 1.65467E-10
Maharashtra bank return = -15.66874161
Nifty return = -0.003618382
T stat for BETA = -8.0408687
Conclusion:
Above the equation shows the relationship between y and x negative sign which means there is inverse relation which means if x rises y falls and vice versa.
R2 is 0.5688 which means 56.88% of Y is explained by X.
Similarly, F is 64.6555 which also more than table value.
Reference:
1. Geeta Sharma & Ganesh Kawadia, (2006),”Efficiency Of Urban Cooperative Banks Of Maharashtra: A Data Analysis”, The IUP Journal of Bank Management, IUP Publications, vol. 0(4), pages 25-38, November 2006.
2. Ambuj Gupta, (2021), “The Devilas’s Laugh at Corporate Governance: The Case of Punjab and Maharashtra Co-operative Bank (PMC Bank) India,” Indian Journal of Corporate Governance, , vol. 14(2), pages 248-267, December2021.