FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN INDIA
Dr.C. PARAMASIVAN Assistant Professor
G.RAVICHANDIRAN Ph.D. Full Time Research Scholar
PG & Research Department of Commerce Periyar E.V.R.College (Autonomous), Tiruchirappalli620023. (Affiliated to Bharathidasan University, Tiruchirappalli, India)
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
A Study on Factors Influencing the Financial Performance Analysis Selected Pr...Dr. Amarjeet Singh
The growth of a country's banking sector has a significant impact on its economic development. The banking sector plays a critical role in determining a country's economic future. A well-planned, structured, efficient, and viable banking system is an essential component of an economy's economic and social infrastructure. In modern society, a strong banking system is required because it meets the financial needs of the modern society. In a country's economy, the banking system plays a crucial role. Because it connects surplus and deficit economic agents, the bank is the most important financial intermediary in the economy. The banking system is regarded as the economy's lifeline. It meets the financial needs of commerce, industry, and agriculture. As a result, the country's development and the banking system are intertwined. They are critical in the mobilisation of savings and the distribution of credit to various sectors of the economy. India's private sector banks play a critical role in the country's economic development. So The financial performance of private sector banks must be evaluated carefully.
FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN INDIA
Dr.C. PARAMASIVAN Assistant Professor
G.RAVICHANDIRAN Ph.D. Full Time Research Scholar
PG & Research Department of Commerce Periyar E.V.R.College (Autonomous), Tiruchirappalli620023. (Affiliated to Bharathidasan University, Tiruchirappalli, India)
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
A Study on Factors Influencing the Financial Performance Analysis Selected Pr...Dr. Amarjeet Singh
The growth of a country's banking sector has a significant impact on its economic development. The banking sector plays a critical role in determining a country's economic future. A well-planned, structured, efficient, and viable banking system is an essential component of an economy's economic and social infrastructure. In modern society, a strong banking system is required because it meets the financial needs of the modern society. In a country's economy, the banking system plays a crucial role. Because it connects surplus and deficit economic agents, the bank is the most important financial intermediary in the economy. The banking system is regarded as the economy's lifeline. It meets the financial needs of commerce, industry, and agriculture. As a result, the country's development and the banking system are intertwined. They are critical in the mobilisation of savings and the distribution of credit to various sectors of the economy. India's private sector banks play a critical role in the country's economic development. So The financial performance of private sector banks must be evaluated carefully.
A STUDY ON PROFITABILITY OF MSME LENDING BUSINESS FOR BANKS IN INDIAJohn1Lorcan
Micro Small and Medium enterprises play a very important role in India economy. MSMEs face several
problems, non-availability of finance is an important challenge for MSMEs in India. Among MSMEs,
micro unit face even more challenges as compared to medium and small enterprises. This research paper
is a study on the profitability of MSME loans given by banks in India. The analyses conclude that the
growth of MSMEs is higher than the growth of GDP and hence MSMEs are driving growth of the country;
MSMEs are paying higher rate of interest and hence banks generate better interest income on these loans;
and the NPAs in MSME accounts are lesser than the NPAs in large accounts. Hence the study concludes
that lending to MSMEs by banks is more remunerative and is also helping the country increase its GDP
growth and employment. Therefore, the banks should provide more loans to MSMEs by simplifying their
processes.
Public sector banks performance and contribution on pradhan mantri jan dhan y...RAVICHANDIRANG
Indian government and RBI are trying for so many years to bring all the people in the ambit
of banking. To achieve this objective, Prime Minister Narendra Modi announced “Pradhan Mantri Jan
Dhan Yojana” on the eve of 68th Independence Day to reduce financial untouchability by including
millions of people in the financial mainstream and targeted to open 7.5 crore bank accounts till 26th
January 2015. By joining hands with the people at the ‘bottom of the pyramid’, this programme will
give a new height to our economy. In the due course of time the plan is to also cover these account
holders with insurance and pension products. About 60% of the population in India does not have
access to a bank account. The urban population of financially excluded category mainly comprises
low income groups like urban labourers, slum dwellers of the cities and socially excluded
communities. This paper focuses on public sector banks’ performance and contribution towards in
Pradhan Mantri Jan Dhan Yojana in India.
FINANCIAL INCLUSION IN INDIA: A ROAD MAP TOWARDS FUTURE GROWTHIAEME Publication
Financial inclusion is an innovative concept which makes alternative techniques to promote the banking habits of the people. However for attaining the objectives of inclusive growth there is a need for resources, and for resource generation and mobilization financial inclusion is required. It plays a very crucial role in the process of economic growth. Financial inclusion stands for delivery of appropriate financial services at an affordable cost, on timely basis to vulnerable groups such as low income groups and weaker section who lack access to even the most basic banking services
Status of NPAs & their Impact on the Public Sector Banks and the Economy in I...Premier Publishers
The paper is to examine the status of NPAs and their impact of public sector banks and economy in India. The secondary data were used for the study and simple percentage used. NPAs are serious threat to the Indian Economy for the past two decades. The increasing mount amounts of NPAs in banking sector are facing great difficulties in recent two decades. In India, the loans providing to priority sector is main commitment of all public sector banks. Private sector banks are providing loan their foremost portion to corporate sector. It is not only after the performance of banking sector, but also affect the entire economic system in the country. The problems of stressed assets/ NPAs are not a new concept to our banking system. The paper divides into five sections. The first section deals with introductory nature and statement of the problem. The second section is deals with literature review. The data base and methodology has been presented in third section. The fourth section explores the impact of rising NPAs on public sector banking performance. Finally, the summary and conclusion has been presented. PSBs should develop the skills and practices towards credit and credit risk management. The government has to introduce flexible compensation package and incentives to the managements of PSBs linked to the performance so that it will improve profitability and reduce NPAs.
Growth and Future Prospects of MSME in IndiaIJAEMSJORNAL
In recent years, the significance of MSME has been recognized in the world’s countries for its major contribution in various socio-economic objectives such as higher economic growth and employment, output, nurturing entrepreneurship and encouragement and support for exports. MSME play a vital role in the industrial development of any country. The MSME sector is a backbone of Indian economy for its contribution to growth of Indian economy. This sector is very much important for moves towards a faster and inclusive growth of country. The MSME sector can help for achieving the target of Nation Manufacturing Policy that manufacturing should contribute 25% in India’s GDP by 2022. For that purpose, the government of India has taken a good initiative of “Make in India”. This paper is to focus on performance of MSME & growth and opportunities. It is concluded that this sector significantly contributes in employment, exports and manufacturing output.
Local Government Grants And Sme Performance, Evidence From Surakarta City, In...inventionjournals
This study analyzes effects of government direct spending to Small and Medium Entreprises (SME). Some scholars and policy makers belief that government should issues several industrial policies to strengthen SME performance. This study analyzes those policies in Surakarta city. In this study, we assess the effect of local government direct spending to SME such as, capital grants and low rate loan to their business performance. We conduct survey which involved 500 SME in manufacturing. Our resuls shows that capital grants and loan policy by local government in Surakarta has positive effect to SME assets, capital and turnover. This study shows that capital grant is more effective compare to other government assistance such as equipment grants and loan to increase SME’s business performance. In this study, industrial policy for SME is not limited to business regulation but it also include direct assistance from local government for these business organizations.
A Study on Emerging Challenges & Opportunities for Indian Banking Sectorinventionjournals
Banking sector is treated as a backbone of a nation as it plays multifarious role for the all total growth of a developing country like India. The banking industry in India has a huge canvas of history, which covers the traditional banking Practices from the time of Britishers to the reforms period, nationalization to privatization of banks and now increasing numbers of foreign banks in India. Therefore, Banking in India has been through a long journey. Banking industry in India has also achieved a new height with the changing times. The use of technology has brought a revolution in the working style of the banks. Nevertheless, the fundamental aspects of banking i.e. trust and the confidence of the people on the institution remain the same. Here commercial banks cater to short and medium term financing requirements, while national level and state level financial institutions meet longer-term requirements. Banking industry in India has also achieved anew height with the changing times. Most of banks provide various services such as Mobile banking, SMS & Net banking and ATMs to their customers for their convenience. The use of technology has brought a revolution in the working style of the banks. Banking today has transformed into a technology intensive and customer friendly model with a focus inconvenience. However, changing dynamics of banking business also brings new kind of risk exposure
A Study on Emerging Challenges & Opportunities for Indian Banking Sectorinventionjournals
Banking sector is treated as a backbone of a nation as it plays multifarious role for the all total growth of a developing country like India. The banking industry in India has a huge canvas of history, which covers the traditional banking Practices from the time of Britishers to the reforms period, nationalization to privatization of banks and now increasing numbers of foreign banks in India. Therefore, Banking in India has been through a long journey. Banking industry in India has also achieved a new height with the changing times. The use of technology has brought a revolution in the working style of the banks. Nevertheless, the fundamental aspects of banking i.e. trust and the confidence of the people on the institution remain the same. Here commercial banks cater to short and medium term financing requirements, while national level and state level financial institutions meet longer-term requirements. Banking industry in India has also achieved anew height with the changing times. Most of banks provide various services such as Mobile banking, SMS & Net banking and ATMs to their customers for their convenience. The use of technology has brought a revolution in the working style of the banks. Banking today has transformed into a technology intensive and customer friendly model with a focus inconvenience. However, changing dynamics of banking business also brings new kind of risk exposure.
A STUDY ON PROFITABILITY OF MSME LENDING BUSINESS FOR BANKS IN INDIAJohn1Lorcan
Micro Small and Medium enterprises play a very important role in India economy. MSMEs face several
problems, non-availability of finance is an important challenge for MSMEs in India. Among MSMEs,
micro unit face even more challenges as compared to medium and small enterprises. This research paper
is a study on the profitability of MSME loans given by banks in India. The analyses conclude that the
growth of MSMEs is higher than the growth of GDP and hence MSMEs are driving growth of the country;
MSMEs are paying higher rate of interest and hence banks generate better interest income on these loans;
and the NPAs in MSME accounts are lesser than the NPAs in large accounts. Hence the study concludes
that lending to MSMEs by banks is more remunerative and is also helping the country increase its GDP
growth and employment. Therefore, the banks should provide more loans to MSMEs by simplifying their
processes.
Public sector banks performance and contribution on pradhan mantri jan dhan y...RAVICHANDIRANG
Indian government and RBI are trying for so many years to bring all the people in the ambit
of banking. To achieve this objective, Prime Minister Narendra Modi announced “Pradhan Mantri Jan
Dhan Yojana” on the eve of 68th Independence Day to reduce financial untouchability by including
millions of people in the financial mainstream and targeted to open 7.5 crore bank accounts till 26th
January 2015. By joining hands with the people at the ‘bottom of the pyramid’, this programme will
give a new height to our economy. In the due course of time the plan is to also cover these account
holders with insurance and pension products. About 60% of the population in India does not have
access to a bank account. The urban population of financially excluded category mainly comprises
low income groups like urban labourers, slum dwellers of the cities and socially excluded
communities. This paper focuses on public sector banks’ performance and contribution towards in
Pradhan Mantri Jan Dhan Yojana in India.
FINANCIAL INCLUSION IN INDIA: A ROAD MAP TOWARDS FUTURE GROWTHIAEME Publication
Financial inclusion is an innovative concept which makes alternative techniques to promote the banking habits of the people. However for attaining the objectives of inclusive growth there is a need for resources, and for resource generation and mobilization financial inclusion is required. It plays a very crucial role in the process of economic growth. Financial inclusion stands for delivery of appropriate financial services at an affordable cost, on timely basis to vulnerable groups such as low income groups and weaker section who lack access to even the most basic banking services
Status of NPAs & their Impact on the Public Sector Banks and the Economy in I...Premier Publishers
The paper is to examine the status of NPAs and their impact of public sector banks and economy in India. The secondary data were used for the study and simple percentage used. NPAs are serious threat to the Indian Economy for the past two decades. The increasing mount amounts of NPAs in banking sector are facing great difficulties in recent two decades. In India, the loans providing to priority sector is main commitment of all public sector banks. Private sector banks are providing loan their foremost portion to corporate sector. It is not only after the performance of banking sector, but also affect the entire economic system in the country. The problems of stressed assets/ NPAs are not a new concept to our banking system. The paper divides into five sections. The first section deals with introductory nature and statement of the problem. The second section is deals with literature review. The data base and methodology has been presented in third section. The fourth section explores the impact of rising NPAs on public sector banking performance. Finally, the summary and conclusion has been presented. PSBs should develop the skills and practices towards credit and credit risk management. The government has to introduce flexible compensation package and incentives to the managements of PSBs linked to the performance so that it will improve profitability and reduce NPAs.
Growth and Future Prospects of MSME in IndiaIJAEMSJORNAL
In recent years, the significance of MSME has been recognized in the world’s countries for its major contribution in various socio-economic objectives such as higher economic growth and employment, output, nurturing entrepreneurship and encouragement and support for exports. MSME play a vital role in the industrial development of any country. The MSME sector is a backbone of Indian economy for its contribution to growth of Indian economy. This sector is very much important for moves towards a faster and inclusive growth of country. The MSME sector can help for achieving the target of Nation Manufacturing Policy that manufacturing should contribute 25% in India’s GDP by 2022. For that purpose, the government of India has taken a good initiative of “Make in India”. This paper is to focus on performance of MSME & growth and opportunities. It is concluded that this sector significantly contributes in employment, exports and manufacturing output.
Local Government Grants And Sme Performance, Evidence From Surakarta City, In...inventionjournals
This study analyzes effects of government direct spending to Small and Medium Entreprises (SME). Some scholars and policy makers belief that government should issues several industrial policies to strengthen SME performance. This study analyzes those policies in Surakarta city. In this study, we assess the effect of local government direct spending to SME such as, capital grants and low rate loan to their business performance. We conduct survey which involved 500 SME in manufacturing. Our resuls shows that capital grants and loan policy by local government in Surakarta has positive effect to SME assets, capital and turnover. This study shows that capital grant is more effective compare to other government assistance such as equipment grants and loan to increase SME’s business performance. In this study, industrial policy for SME is not limited to business regulation but it also include direct assistance from local government for these business organizations.
A Study on Emerging Challenges & Opportunities for Indian Banking Sectorinventionjournals
Banking sector is treated as a backbone of a nation as it plays multifarious role for the all total growth of a developing country like India. The banking industry in India has a huge canvas of history, which covers the traditional banking Practices from the time of Britishers to the reforms period, nationalization to privatization of banks and now increasing numbers of foreign banks in India. Therefore, Banking in India has been through a long journey. Banking industry in India has also achieved a new height with the changing times. The use of technology has brought a revolution in the working style of the banks. Nevertheless, the fundamental aspects of banking i.e. trust and the confidence of the people on the institution remain the same. Here commercial banks cater to short and medium term financing requirements, while national level and state level financial institutions meet longer-term requirements. Banking industry in India has also achieved anew height with the changing times. Most of banks provide various services such as Mobile banking, SMS & Net banking and ATMs to their customers for their convenience. The use of technology has brought a revolution in the working style of the banks. Banking today has transformed into a technology intensive and customer friendly model with a focus inconvenience. However, changing dynamics of banking business also brings new kind of risk exposure
A Study on Emerging Challenges & Opportunities for Indian Banking Sectorinventionjournals
Banking sector is treated as a backbone of a nation as it plays multifarious role for the all total growth of a developing country like India. The banking industry in India has a huge canvas of history, which covers the traditional banking Practices from the time of Britishers to the reforms period, nationalization to privatization of banks and now increasing numbers of foreign banks in India. Therefore, Banking in India has been through a long journey. Banking industry in India has also achieved a new height with the changing times. The use of technology has brought a revolution in the working style of the banks. Nevertheless, the fundamental aspects of banking i.e. trust and the confidence of the people on the institution remain the same. Here commercial banks cater to short and medium term financing requirements, while national level and state level financial institutions meet longer-term requirements. Banking industry in India has also achieved anew height with the changing times. Most of banks provide various services such as Mobile banking, SMS & Net banking and ATMs to their customers for their convenience. The use of technology has brought a revolution in the working style of the banks. Banking today has transformed into a technology intensive and customer friendly model with a focus inconvenience. However, changing dynamics of banking business also brings new kind of risk exposure.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
Which Crypto to Buy Today for Short-Term in May-June 2024.pdf
Flusserstudies PAPER IMPLICATIONS OF BANKING SECTOR ON ECONOMIC DEVELOPMENT IN INDIA.pdf
1. (UGC Care Listed Journal)
Page | 1068
ISSN – 1661-5719
Volume No.: 30
IMPLICATIONS OF BANKING SECTOR ON ECONOMIC DEVELOPMENT IN INDIA
Bhadrappa Haralayya
Post-Doctoral Fellowship Research Scholar, Srinivas University, Mangalore, India
Orcid ID-0000-0003-3214-7261, bhadrappabhavimani@gmail.com
P. S. Aithal
Professor, College of Management and Commerce, Srinivas University, Mangalore, India
Orcid ID-0000-0002-4691-8736, psaithal@gmail.com
Abstract
Banking sector provides several facilities in a country. Financial activities of banking sector are
crucial drivers to increase the socio-economic development. Subsequently, economic development
increase as increase in efficiency of banking sector in a nation. Existing researchers used different
indicators of banking sector to examine their impact on economic growth in developed and
developing economies. In India, limited studies could examine the impact of banking sector on
economic development. Therefore, this study assesses the impact of banking sector on per capita
gross domestic product (GDP) in India using a time series data during 1981-2019. It used per capita
GDP as dependent variable, and broad money as a % of GDP, broad money to total reserves ratio,
domestic credit to private sector as a % of GDP, final consumption expenditure as a % of GDP,
annual consumer prices inflation, literacy rate and real interest rate as independent variables. It
applied linear, log-linear and non-linear regression models to estimate the regression coefficient
of aforesaid variables with per capita GDP. The empirical results claimed that broad money to
total reserve ratio, domestic credit to private sector, final consumption expenditure and literacy
rate have positive impact on per capita GDP. Consumer price inflation and real interest rate have
negative impact on per capita GDP in India. India needs to control high inflation and real interest
rate to increase the demand of goods and services to strengthen the economic development. The
estimates of the study clearly indicate that financial activities of banking sector play a vital
contribution to increase economic development in India.
Keywords: Economic growth; Economic development; Per capita gross domestic product;
banking sector; India.
1. Introduction
Financial institutions have a significant contribution to increase the socio-economic development
of the people in several ways (Joshi, 2017). Furthermore, economic development depends upon
efficient financial institutions of a nation (Sharma et al., 2012). Hence, financial development is
useful to increase demand of goods and service, thus it plays an effective role to sustain the
economic growth of a nation (Liang and Reichert, 2006). Banking is a financial organization which
act as intermediary between lenders and creditors (Ruslan et al., 2018; Jha, 2020). Banking sector
is useful to convert deposits into productive investment, creating new capital and accelerate
economic development (Tanwar et al., 2020). It is also conceptually proved the overall growth of
2. (UGC Care Listed Journal)
Page | 1069
ISSN – 1661-5719
Volume No.: 30
an economy is significantly associated with the appropriate health of banking sector (Hafsal et al.,
2020). Therefore, banking sector performs several activities such as accepting deposits from
individual and business community and provide loans to the common people and business
community (Kumari, 2017; Muniswamy, 2018). As banking sector accepts the small saving of
common citizen and provide loans to the common people for various purposes. Furthermore, the
banking institutions motivates people to deposit their small saving in banks. The banking
institution also provides the short-term, medium-term and long-term loans to the business
community in all sectors. Most importantly, it provides the direct financial support to the business
community and farming community. Accordingly, it creates the employment opportunities in
industry and agricultural sectors. Subsequently, demand of goods and services are expected to be
increase as increase in the role of banking sector in an economy. Hence, banking institution is
helpful to maintain the money flow and contribute to create physical assets in the economy.
Banking sector is also effective to operate efficiency, provide sustainability in financial system
and increase equitable economic growth through providing easy, safe and financing to the public
(Ruslan et al., 2018). Furthermore, it also prepares the path for capital formation in a country.
Consequently, banking sector have a crucial contribution towards economic development of a
nation (Muniswamy, 2018; Kumar, 2019; Deb, 2019). Hamid et al. (2017) have argued the banking
sector play important role to maintain economic development an economy. Kumar (2019)
highlighted the banking sector play a significant role to sustain the economic stability of a nation.
Bhatia and Mahendru (2015) have argued that efficient banking system contribute towards
economic development. Efficient efficiency of banking sector is helpful to increases the
mobilization of saving and deposits funds to increase economic growth (Karimzadeh, 2012). Rajan
and Zingales (1998) claimed the efficient banking sector works as important driver to strengthen
the economic growth through mobilization of financial saving and use these saving to create
physical assets.
In India, banking system was established in 18th
century and General Bank of India was founded
in 1786 (Kumari, 2017). State Bank of India is an oldest bank which was setup in India in 1806
(Kumari, 2017; Muniswamy, 2018). The Reserve Bank of India (RBI) was nationalized on 01
April, 1935 (Kumari, 2017; Jha, 2020). In India, 14 commercial banks were nationalized and 4
other banks were also merged with other public sector banks (Jha, 2020). In India, the RBI govern
and regulate the banking system. Indian banking sector can be divided in two broad categories i.e.,
scheduled and non-scheduled banks. All cooperative or commercial banks which are listed under
2nd
schedule of the RBI Act, 1934 known as scheduled banks in India (Jha, 2020). Cooperative
banks are registered under the Society Registration Act (Jha, 2020). Thereupon, commercial banks
can be divided in four categorized i.e., public sector banks, private sector banks, foreign banks and
regional rural banks (Jha, 2020). Public sector banks are the undertaking enterprises of
Government of India. There are 12 public sector banks in India. Recently, Government of India
has merged many public sector banks in order to strengthen their balance sheets (Jha, 2020).
Private sector banks are privately held by individuals. There are many private banks such as ICICI
3. (UGC Care Listed Journal)
Page | 1070
ISSN – 1661-5719
Volume No.: 30
banks, Axis Banks etc. have the private ownership of such types of banks in India (Jha, 2020).
Foreign banks are registered in India as banks as per the requisite banking license from the RBI in
India. The Government of India is established regional rural bank in order to increase the use of
banking system by grass root level in rural area (Jha, 2020). Furthermore, there are small finance
and payment banks in India. Small finance banks are available in those areas where banks cannot
reach for local people (Jha, 2020). Payment banks facilitate payments and remittances related
activities in India (Jha, 2020).
As banking sector provided the financial support in economic disaster in Indian economy in
different time spans (Sharma et al., 2012). Indian banking sector is financially stable and has the
ability to resilient in phase of economic crisis (Sharma et al., 2012). Also, Thus, banking sector is
the backbone of Indian economy due to several reasons. In India, banking sector includes public
sector, private sector and foreign sector banks. While, public sector bank has control around 80%
of the market (Kumari, 2017). Indian banking sector has 7.7% contribution in India’s GDP (Singh
and Malik, 2018). Thus, banking sector has a vital contribution economic development in India
(Kumari, 2017). The commercial bank’s credit as a percent of GDP increased from 23.6% in 2001
to 53% in 2015 (Ranajee, 2018). However, Indian banking sector is facing problem due to rising
non-performing assets (NPAs) (Goyal et al., 2019). There are some other financial activities in
banking sector which has positive and significant impact on economic growth and development.
In this regards, in India, several studied have provided that the banking sector have a positive
impact on economic development (Muniswamy, 2018; Tanwar et al., 2020). However, limited
studied could provide the association of financial performance of banking sector with economic
growth at national level in India. Furthermore, there are many research questions must be
addressed by the exiting researchers which are given as:
What types of services are providing by banking sector in India?
What is role of banking sector in Indian economy in general?
How financial activities of banking sector have a significant impact on economic
development in India?
What are the linkages of banking sector with economic development in India?
With regards to aforementioned research questions, the present study achieved following
objectives:
To examine the impact of banking sector on economic development in India based on existing
studies.
To assess the impact of financial activities of banking sector on economic development in
India.
2. Review of Literature
2.1. Banking Sector and Economic Development
4. (UGC Care Listed Journal)
Page | 1071
ISSN – 1661-5719
Volume No.: 30
There are several ways in which banking sector promote economic growth and economic
development. This section provides the role of banking sector in different activities of a nation.
Banking sectors in conducive to promote saving habits of the people for deposit in the banks for
get better and safe return (Muniswamy, 2018). Capital formation works as blood for a nation. As
banking sector collect deposits from depositors and provide collected amount to the people,
business community, farmers and others as loans to earn profit. Thus, the banking sector is highly
effective to create capital formation (Muniswamy, 2018). Banking institutions provides the loans
to the business community to set up new industry and venture (Singh et al., 2019; Singh et al.,
2020). Financial support from banking sector to small companies is useful to create start-up (Jyoti
and Singh, 2020). Therefore, banking sector is useful to increase industrialization and
entrepreneurship ecosystem (Singh and Ashraf, 2020; Singh and Jyoti, 2020). Appropriate banking
sector is useful to make transfer of money for trade of goods and services through mobile banking,
internet banking, debit cards, credit cards and other (Muniswamy, 2018). The growth of Indian
economy largely depends upon agricultural sector as the sector meet the food security of Indian.
Banking sector provide short-term and long-term loans to the farmers for their farming activities.
Subsequently, banking sector promote agricultural production (Kumar et al., 2017; Singh and
Jyoti, 2021). As banking sector provide loans to the industry and business community. Therefore,
it creates employment opportunities at grater scale (Muniswamy, 2018). Economic development
may be adversely affected due to inflation, deflation and crisis. A monetary policy is useful to
control inflation, deflation and crisis (Muniswamy, 2018). As monetary policy governs by central
bank of nation, hence, banking sector has a significant contribution to maintain financial stability
in a country.
2.2. Association of Banking Sector and Economic Development
At present banking sector in one of the biggest service providers sectors in India (Kumari, 2017).
In India, banking sector is providing several services such as credit cards, debit cards, ATM
services, telebanking, internet banking, electronic payments, consumer finance, life insurance,
mutual fund, pension fund, regulation services, stock broking services (Kumari, 2017;
Muniswamy, 2018). Accordingly, banking sector have a vital contribution to increase economic
growth. Previous studied have theoretically and empirically proved that banking sector have a
positive impact on economic growth. For instance, Muniswamy (2018) assessed the role of banks
in capital formation and economic growth in India. Alam et al. (2021) have reported that interest
margin and return on assets of banking sector have significant impact on economic growth in India.
Al-Homaidi et al. (2018) have claimed that commercial banks dominate the financial system and
have vital contribution in economic development. However, previous could not find uniform
relationship between economic growth and banking sector. Saeed et al. (2018) reported positive
bi-directional causality relationship between banking sector and economic growth in Pakistan.
Joshi (2017) assessed the relationship between the financial development and growth in India.
3. Research Methodology
5. (UGC Care Listed Journal)
Page | 1072
ISSN – 1661-5719
Volume No.: 30
3.1. Explanation of Dependent and Independent Variables
Previous studies have also used different indicators such as gross domestic product, per capita
gross domestic product and growth gross domestic product as a proxy for economic growth,
economic development and economic proxy across countries (Liang and Reichert, 2006;
Prochniak and Wasiak, 2016; Puatwoe and Piabup, 2017; Joshi, 2017; Al-Homaidi et al., 2018;
Singh and Malik, 2018). Liang and Reichert (2006) used aggregate output or real GDP as
dependent variable, and capital stock and financial sector development are used as independent
variables. Hence, previous studies have used different indicators as proxy for financial or banking
sector to examine their impact on economic growth and economic development in different
countries. For instance, Prochniak and Wasiak (2016) examined the impact of financial sector on
economic growth in 28 EU and 34 OECD countries during 1993 – 2013. This study is used
economic growth as dependent variable, and bank non-performing loans, bank capital to assets
ratio, market capitalization of listed companies, turnover ratio of stocks traded and monetization
ratio as independent variables in regression model. Puatwoe and Piabup (2017) have assessed the
implications of financial sector development and economic growth in Cameroon. Al-Homaidi et
al. (2018) have considered the gross domestic product, inflation rate, interest rate and exchange
rate to analysis banking performance in India. Guru and Yadav (2019) have examined the
relationship between financial development and economic growth in BRICS countries. This study
is used macroeconomic indicators such as credit to deposit ratio, domestic credit to private sector,
inflation, exports and enrolment in secondary education. Al-Homaidi et al. (2018) have used
different macroeconomic indicators such as gross domestic product, inflation rate, interest rate,
exchange rate and others to assess the macro-economic determinants of profitability of commercial
banks in India. Saeed et al. (2018) have considered lending capability, innovation, interest margin
and bank investment as proxy variables of banking sector to examine their impact on economic
growth in Pakistan. Joshi (2017) have used M2 GDP ratio and ratio of stock market capitalization
to GDP in India.
3.2. Empirical Model
As economic development may not be capture by a single variable of nation. Prior studied have
used gross domestic product, per capita GDP and growth in gross domestic product as a proxy for
economic development in empirical investigation (Singh and Malik, 2018). Therefore, per capita
gross domestic product is used as proxy for economic development to assess its association with
financial activities of banking sector in India in this study. Joshi (2017) have also used GDP per
capita as a proxy for economic growth to assess its relationship with financial development in
India. Broad money (% of GDP), domestic credit to private sector (% of GDP) and broad money
to total reserves ratio are used to assess the impact of banking sector on per capita GDP in this
study. Real interest rate (%) is an important driver to increase the attention of common people and
business community to take the loan from banking sector (Al-Homaidi et al., 2018). Hence, it is
expected that per capita GDP may decline as increase in real interest rate. Demand of goods and
6. (UGC Care Listed Journal)
Page | 1073
ISSN – 1661-5719
Volume No.: 30
service may decline due to increase in consumer prices inflation (annual %) in a country.
Subsequently, it is likely to be predicted that Final consumption expenditure decreases as increase
in consumer price inflation. Hence, broad money (% of GDP), broad money to total reserves ratio,
domestic credit to private sector (% of GDP), final consumption expenditure (% of GDP),
consumer prices inflation (annual %), literacy rate adult total and real interest rate (%) are used as
independent variables in this study. This study used time series data for above-mentioned variables
during 1981-2019. All data is derived from official website of the World Bank (World
Development Indicator). Linear, log-linear and non-linear regression models are used to assess the
influence of aforesaid explanatory variables on per capita gross domestic product. Following linear
regression model is used:
(GDPPC)t = β0 +β1 (BPGDP)t+β2 (BMTRR)t +β3 (DCPSPGDP)t +β4 (FCEPGDP) +β5 (CPI)t +β6
(LRAT)t +β7 (RIR)t + ut (1)
Here, t is time period (1981-2019), β0 is constant term; β1, β2, …, β7 are the regression coefficient
of associated explanatory variables; and ut is the error term in equation (1). The explanation of
variables is given in Table 1.
Table 1: List of dependent and independent variables
Variable Symbol Unit
Source of
Data
GDP per capita (constant 2010 US$) GDPPC US $
World
Developmen
t Indicator
(World
Bank)
Broad money (% of GDP) BPGDP Number
Broad money to total reserves ratio BMTRR %
Domestic credit to private sector (% of GDP)
DCPSPGD
P
%
Final consumption expenditure (% of GDP) FCEPGDP %
Consumer prices inflation (annual %) CPI %
Literacy rate adult total (% of people ages 15 and
above)
LRAT %
Real interest rate (%) RIR %
Log-linear regression model is used in following form:
ln(GDPPC)t = α0 +α1 ln(BPGDP)t+α2 ln(BMTRR)t +α3 ln(DCPSPGDP)t +α4 ln(FCEPGDP) +α5
ln(CPI)t +α6 ln(LRAT)t +α7 ln(RIR)t + θt (2)
Here, ln is natural logarithm of corresponding variables, α0 is constant term; α1, α2, …, α7 are the
regression coefficient of associated explanatory variables; and θt is the error term in equation (2).
Original and square term of all explanatory variables are considered in non-linear regression
7. (UGC Care Listed Journal)
Page | 1074
ISSN – 1661-5719
Volume No.: 30
model. Non-linear regression model is used in following form:
(GDPPC)t = λ0 +λ1 (BPGDP)t+λ2 (Sq. BPGDP)t +λ3 (BMTRR)t +λ4 (Sq. BMTRR)t +λ5
(DCPSPGDP)t +λ6 (Sq. DCPSPGDP)t +λ7 (FCEPGDP)t +λ8 (FCEPGDP)t +λ9 (CPI)t +λ10 (CPI)t
+λ11 (LRAT)t +λ12 (LRAT)t +λ13 (RIR)t +λ14 (RIR)t + µt (3)
Here, Sq. is square term of respective variables; λ0 is constant term; λ1, λ2, …, λ7 are the regression
coefficient of associated explanatory variables; and µt is the error term in equation (3).
3.3. Process to Select an Appropriate Model
As this study is used a time series data of dependent and independent variables during 1981-2019.
Therefore, it is necessary to check the normality, stationarity, unit root, autocorrelation, multi-
correlation and heteroskedasticity in the time series data. Accordingly, skewness and kurtosis
values of each variable is estimated the check the normality of the data (Singh and Jyoti, 2021).
The existence of unit root in each variable of time series data is check through Augmented Dickey-
Fuller (ADF) unit root test (Singh, 2017). Most variables are found stationarity in nature. Multi-
correlation shows the linear relationship among the explanatory variables (Singh, 2017). Hence,
the existence of multi-correlation is identified through variance inflation factor (VIF). Presence of
autocorrelation is a prime problem of time series data (Singh, 2017). Therefore, Durbin-Watson d-
statistics and Durbin’s Alternative test is used to check the presence of autocorrelation in time
series data. Cameron and Trivedi decomposition of IM-test, and Breusch-Pagan/Cook-Weisberg
test are considered to identify the presence of heteroskedasticity in the time series data (Singh,
2017). Since, this study is used linear, log-linear and non-linear regression models, thus, Ramsay
RESET test is used to check the well-defined function form of empirical model (Singh, 2017).
Furthermore, Akaike Information Criterion and Bayesian Information Criterion (BIC) are used to
check the consistency of regression coefficients of explanatory variables in the proposed model
(Singh, 2017).
4. Empirical Results and Discussion
The statistical summary (i.e., minimum, maximum, mean, standard, skewness and kurtosis) of
variables in given in Table 2. The skewness values of most variables (broad money to total reserves
ratio and real interest rate) lie between – 1 to + 1. Therefore, all variables are in the normal forms.
Table 2: Statistical summary of the variables
stats min max mean sd skewness kurtosis
gdppc 438.01 2151.73 989.63 507.22 0.86 2.58
bpgdp 34.46 79.08 57.48 15.88 0.12 1.38
bmtrr 3.18 24.02 7.34 4.31 1.91 7.17
dcpspgdp 21.23 52.39 34.62 12.02 0.42 1.38
fcepgdp 65.62 85.77 74.49 6.42 0.36 1.95
cpi 2.49 13.87 7.81 3.03 0.21 2.08
8. (UGC Care Listed Journal)
Page | 1075
ISSN – 1661-5719
Volume No.: 30
lrat 40.76 76.25 58.14 10.90 -0.04 1.71
rir -1.98 9.19 5.95 2.36 -1.07 4.65
Source: Estimated by author.
The results of statistical tests which are used to identify the presence of unit root, autocorrelation,
multi-correlation and heteroskedasticity in time series in given in Table 3. The Chi2
values under
Ramsay RESET test for dependent and independent variables are found statistically insignificant.
Thus, the estimates infer that functional form of linear, log-linear and non-linear regression models
are appeared well defined. The Chi2
values under Breusch-Pagan / Cook-Weisberg and Cameron
& Trivedi's decomposition of IM-tests are also observed statistically insignificant. The estimates
imply that time series data do not have heteroskedasticity. Furthermore, as per values of Chi2
under
Durbin's alternative test and Breusch-Godfrey LM test, it is found that there is no existence of
autocorrelation in the time series data.
Table 3: Results of statistical tests
Model Linear Log-linear Non-linear
Ramsey RESET test using powers of the fitted
values of gdppc (Chi2
value)
22.99 17.38 49.47
Ramsey RESET test using powers of the
independent variables (Chi2
value)
20.23 9.6 20.6
Breusch-Pagan / Cook-Weisberg test for
heteroskedasticity (Chi2
value)
6.14 2.02 7.2
Cameron & Trivedi's decomposition of IM-test
(Chi2
value)
36.1 40.68 54.96
Durbin's alternative test for autocorrelation
(Chi2
value)
20.25 6.329 17.789
Breusch-Godfrey LM test for autocorrelation
(Chi2
value)
15.716 6.807 17.009
Source: Estimated by author.
Table 4: Impact of financial activities of banking sector on per capita GDP
Model Linear Model Log-linear Non-linear
Number of
obs.
39 38 39
F-Value 280.95 833.16 388.25
Prob > F 0.000 0.000 0.000
R-squared 0.9845 0.9949 0.9956
Adj. R-
squared
0.981 0.9937 0.993
VIF 16.66 17.52 4104.64
10. (UGC Care Listed Journal)
Page | 1077
ISSN – 1661-5719
Volume No.: 30
linear regression model. As R-square is found 0.99%, hence 99% variation in per capita GDP can
be explained by undertaken variables. The regression coefficient of Broad money with per capita
GDP is negative and statistically significant. Thus, the estimate demonstrates the per capita GDP
may be declined as increase in broad money in India. However, Broad money to total reserves
ratio show a positive impact on per capita GDP in India. Domestic credit to private sector is
positively associated with per capita GDP. Thus, the result indicates domestic credit to private
sector has a crucial contribution to increase per capita GDP in India. Consumer price inflation and
real interest rate also have negative impact on per capita GDP in India. Hence, India needs to
control inflation and interest rate to increase per capita GDP at greater scale. The regression
coefficient of literacy rate with per capita GDP is seemed positive and statistically significant.
Thus, the estimate clearly infers the literacy rate will play a crucial role to increase the per capita
GDP in India. The estimates as per the non-linear regression model indicates broad money to total
reserves ratio, domestic credit to private sector, Final consumption expenditure, consumer prices
inflation, literacy rate and real interest rate have a non-linear relationship with per capita GDP in
India.
5. Conclusion and Policy Suggestions
The prime aim of this study is to examine the impact of banking sector on economic
development in India based on existing studies. Thereupon, it assesses the impact of financial
activities of banking sector on economic development using empirical analysis. For this
investigation, it used per capita GDP as dependent variable, and broad money as a % of GDP,
broad money to total reserves ratio, domestic credit to private sector as a % of GDP, final
consumption expenditure as a % of GDP, annual consumer prices inflation, literacy rate and real
interest rate as independent variables in a time series of 1981-2019.
The regression coefficient of explanatory variables with per capita GDP is estimated through
linear, log-linear and non-linear regression models. The results shows that broad money to reserve
ratio and Domestic credit to private sector have a positive impact on per capita GDP. Domestic
consumption expenditure is also showed a positive impact on per capita GDP. Real interest rate
and consumer price inflation have a negative impact on per capita GDP. Hence, it is suggested that
India needs to control interest rate and consumer price inflation to increase the demand of goods
and service in domestic market. It would be useful to create employment opportunities and
accordingly per capita GDP in India. Literacy rate is also an important driver to increase the per
capita GDP. As literate person has a greater possibility to be engaged in economic activities as
compared to illiterate person. Hence, India requires to create skills among the people to get more
jobs in India. Subsequently, it would be conducive to increase per capita GDP in India. The
empirical results based on non-linear regression model show that broad money to total reserves
ratio, domestic credit to private sector, final consumption expenditure, consumer prices inflation,
literacy rate and real interest rate have a non-linear association with per capita GDP. Furthermore,
some variables have hilly and U-shaped association with per capita GDP in India.
11. (UGC Care Listed Journal)
Page | 1078
ISSN – 1661-5719
Volume No.: 30
References
Alam, Md.S., Rabbani M.R., Tausif M.R. and Abey J. (2021). Banks’ performance and economic
growth in India: A panel cointegration analysis. Economies, 9(38):1-12.
Al-Homaidi E.A., Tabash M.I., Farhan N.H.S. and Almaqtari F.A. (2018). Bank-specific and
macro-economic determinants of profitability of Indian commercial banks: A panel data approach.
Cogent Economics & Finance, 6(1):1-26.
Bhatia A. and Mahendru M. (2015). Assessment of technical efficiency of public sector banks in
India using data envelopment analysis. Eurasian Journal of Business and Economics, 8(15):115-
140.
Deb A. (2019). Operational efficiency and size of commercial banks: A study of the Indian banking
sector. International Journal of Research in Humanities, Arts and Literature, 7(6):11-20.
Guru B.K. and Yadav I.S. (2019). Financial development and economic growth: panel evidence
from BRICS. Journal of Economics, Finance and Administrative Science, 24(47):1-13.
Jha R. (2020). Banking structure in India. https://lawtimesjournal.in/banking-structure-in-india/.
Joshi S. (2017). Financial sector development and economic growth in India: Some reflections.
MPRA Paper No. 81201. https://mpra.ub.uni-muenchen.de/81201/.
Jyoti B. and Singh A.K. (2020). Characteristics and determinants of new start-ups in Gujarat, India.
Entrepreneurship Review, 1(2):1-25.
Hafsal K., Suvvari A. and Durai S.R.S. (2020). Efficiency of Indian banks with non-performing
assets: evidence from two-stage network DEA. Future Bus J, 6(26):1-9.
Hamid N., Ramli N.A. and Hussin A.A.S. (2017). Efficiency measurement of the banking sector
in the presence of non-performing loan. AIP Conference Proceedings 1795(020001):1-8.
Karimzadeh M. (2012). Efficiency analysis by using data envelop analysis model: evidence from
Indian banks. International Journal of Latest Trends in Finance & Economic Sciences, 2(3):228-
237.
Kumar A., Ahmad M.M. and Sharma P. (2017). Influence of climatic and non-climatic factors on
sustainable food security in India: a statistical investigation. International Journal of Sustainable
Agricultural Management and Informatics, 3(1):1-30.
12. (UGC Care Listed Journal)
Page | 1079
ISSN – 1661-5719
Volume No.: 30
Kumar R. (2019). Data envelopment analysis recent applications in banking sector: A survey.
International Journal for Research in Applied Science & Engineering Technology, 7(11):449-456.
Kumari J. (2017). Role of bank in the development of Indian economy. Imperial Journal of
Interdisciplinary Research, 3(1):740-743.
Liang H.Y. and Reichert A. (2006). The relationship between economic growth and banking sector
development. Banks and Bank Systems, 1(2):19-35.
Muniswamy D. (2018). Role of commercial banks in economic development: Indian perspective.
IJRAR, 5(1):645-649.
Prochniak M. and Wasiak K. (2016). The impact of the financial system on economic growth in
the context of the global crisis: empirical evidence for the EU and OECD countries. Empirica,
44(1):295-337.
Puatwoe J.T. and Piabup S.M. (2017). Financial sector development and economic growth:
evidence from Cameroon. Financial Innovation, 3(25):1-18.
Rajan R.G. and Zingales L. (1998). Financial dependence and growth. The American Economic
Review, 88(3):559-586.
Ruslan A., Pahlevi C., Alaam S. and Nohong M. (2018). Determinants of banking efficiency and
its impact on banking competitive advantages. Advances in Economics, Business and Management
Research, 92, 3rd
International Conference on Accounting, Management and Economics, 2018.
Saeed M.Y., Ramzan M. and Hamid K. (2018). Dynamics of banking performance indicators and
economic growth: long-run financial development nexus in Pakistan. European Online Journal of
Natural and Social Science, 7(3):141-163.
Sharma S., Raina D. and Singh S. (2012). Measurement of technical efficiency and its sources: An
experience of Indian banking sector. International Journal of Economics and Management,
6(1):35-57.
Singh A.K. (2017). An empirical analysis to asses the GDP projection of Gujarat state of India.
JNNCE Journal of Engineering and Management, 1(2):51-58.
Singh A.K., Arya A. and Ashraf S.N. (2019). A conceptual review on economic, business,
intellectual property rights and science & technological related activities in Asian economies.
JNNCE Journal of Engineering & Management, 3(2):1-22.
13. (UGC Care Listed Journal)
Page | 1080
ISSN – 1661-5719
Volume No.: 30
Singh A.K., Singh B.J. and Ashraf S.N. (2020). Implication of intellectual property protection, and
science and technological development in the manufacturing sector in selected economies. Journal
of Advocacy, Research and Education, 7(1):16-35.
Singh A.K. and Ashraf S.N. (2020). Association of entrepreneurship ecosystem with economic
growth in selected countries: An empirical exploration. Journal of Entrepreneurship, Business and
Economics, 8(2):36-92.
Singh A.K. and Jyoti B. (2020). Factors affecting firm’s annual turnover in selected manufacturing
industries of India: An empirical study. Business Perspective Review, 2(3):33-59.
Singh A.K. and Jyoti B. (2021). Projected food-grain production and yield in India: An evidence
from state-wise panel data investigation during 1977-2014. The Journal of Agricultural Sciences
– Sri Lanka, 16(1):108-125.
Singh D. and Malik G. (2018). Technical efficiency and its determinants: A panel data analysis of
Indian public and private sector banks. Asian Journal of Accounting Perspectives, 11(1):48-71.
Tanwar J., Seth H., Vaish A.K. and Rao NVM (2020). Revisiting the efficiency of Indian banking
sector: An analysis of comparative models through data envelopment analysis. Indian Journal of
Finance and Banking, 4(1):92-108.