Banking Reforms in India (eBook)

Consolidation, Restructuring and Performance

T R Bishnoi, Sofia Devi (Autoren)

eBook Download: PDF

2017 | 1st ed. 2017
XXI, 241 Seiten
Springer International Publishing (Verlag)
978-3-319-55663-5 (ISBN)

Infos

This book provides a historical evaluation of banking reforms and structural changes in India over the past 25 years. Chapters cover issues in consolidation and restructuring, competition and concentration, performance evaluation in terms of cost efficiency and productivity, profitability, non-performing assets and technology use. The authors use specific regression models to measure the impact of these reforms on bank performance during this period and assess whether or not the consolidation phase is now complete. This volume will be of interest to researchers and academicians interested in the financial history of Indian Banking reforms.

T R Bishnoi, PhD, is the RBI Chair Professor in the Faculty of Commerce at the Maharaja Sayajirao University of Baroda, India. He has held various academic positions including Senior Lecturer in the Department of Economics at the University of Mumbai, India, IFCI Chair Professor in Industrial Finance at the Nirma University of Science and Technology, India, and Associate Professor in the Department of Economics at the M S University of Baroda, India. He has edited two books, authored one book and published more than 30 research papers in professional journals. 

Sofia Devi Sh., PhD, is a Research Assistant at the Reserve Bank of India Endowment Unit at the Maharaja Sayajirao University of Baroda, India. She has over eight years of teaching and research experience as lecturer and research assistant. 

Inhalt

Preface 7
Acknowledgements 10
Contents 12
Abbreviations 13
List of Tables 16
1 Indian Banking Structure: An Overview 19
Introduction 19
Historical Background of Indian Banking 22
Regulation and Optimal Banking Structure 24
Criteria of Optimal Banking Structure 25
Banking Structure After Financial Reforms 28
Narasimham Committee on Financial Reforms 28
India’s Banking Structure: Relative Size of Banking 30
India’s Banking Structure: Accessibility and Outreach 32
India’s Banking Structure: Allocation of Credit 38
Restructuring and Consolidation of Banks: Concepts 40
Restructuring 40
Consolidation 42
Approach of Analysis 42
Conclusion 45
References 46
2 Banking Reforms 48
Introduction 48
Deregulation 52
Liberalizing Entry Barriers and Interest Rates 52
Variable Reserve Ratios 59
Banking Prudential Regulations 62
Capital to Risk-Weighted Asset Ratio 63
Governance: Transparency and Disclosures 67
Classification of Non-performing Assets 69
Income Recognition and Provision Policy 71
Legal Approach to Assets Recovery 72
Conclusion 73
References 74
3 Restructuring and Consolidation—Mergers and Acquisitions 76
Introduction 76
Mergers and Acquisitions: Theory, Objectives and Empirical Evidences 77
Regulatory Framework and Trend in Mergers and Acquisitions 83
Analytical Framework 88
Pre- and Post-merger Performance of Banks 90
Bank of Baroda (BOB) 92
HDFC Bank 93
ICICI Bank 93
IDBI Bank 96
Indian Overseas Bank (IOB) 98
Oriental Bank of Commerce (OBC) 99
Punjab National Bank (PNB) 101
State Bank of India (SBI) 101
Union Bank of India (UBI) 102
Reasons for Statistical Insignificant of Ratios 102
Profitability Ratios 102
Solvency Ratio 103
Other Ratios 103
Conclusion 104
References 105
4 Concentration and Competition 108
Introduction 108
Empirical Studies 114
Methodological Approach and Theoretical Model 120
Structural Measures of Concentration Ratio and Herfindahl-Hirschman Index 121
Non-structural Method of the Panzar-Rosse Model 124
Analysis of Results 126
k-Firm Concentration Ratios and Herfindahl-Hirschman Index Values 126
The Panzar-Rosse Model: Regression Results 128
Price and Non-price Competition 131
Conclusion 134
References 136
5 Cost Efficiency and Productivity 138
Introduction 138
Empirical Studies 139
Statistical Cost Function 141
Analysis of Results 143
Average Size and Size Range 144
Marginal Cost and Mean Average Cost 144
Economies of Scale 147
Sources of Economies and Diseconomies of Scale 157
Minimum Efficient Size 160
Improvement in Cost Efficiency 162
Productivity 165
Empirical Studies on Productivity 165
Trends in Manpower Productivity 167
Analytical Framework and Results 169
Data and Methodology 169
The Malmquist Total Factor Productivity Index 170
Conclusion 176
References 178
6 Profitability 181
Introduction 181
Empirical Studies 183
Profitability 187
Structure of Operating Income and Expenditure 187
Trends in Profitability Ratios 191
Determinants of Profitability 194
Conclusion 200
References 201
7 Non-performing Assets 202
Introduction 202
Theory of Non-performing Assets 203
Information Asymmetry, Adverse Selection and Moral Hazard 203
Macroeconomic Slowdown and Other Factors 205
Policy Definitions of Non-performing Assets 207
Asset Classification 208
Recovery Mechanism of Non-performing Assets 210
Trends in Non-performing Assets 211
Non-performing Assets at the Global Level 211
Non-performing Assets of Commercial Banks 212
Sector-Wise Non-performing Assets 214
Distribution of Non-performing Assets by Bank 217
Analytical Framework and Results 218
Conclusion 221
References 222
8 Information Technology in Banking System 225
Introduction 225
Role of Information Technology in Banking: Select Studies 227
Technology Spread and Intensity in Payment System 229
Information Technology Use and Bank Performance 233
Conclusion 235
References 236
9 Summary and Conclusions 238
Introduction 238
Banking Structure 238
Banking Reforms 242
Consolidation and Restructuring 244
Concentration and Competition 245
Performance 246
Policy Suggestions 247
References 251
Index 252

Produkt-Details

• Erscheint lt. Verlag: 21.6.2017
• Reihe/Serie: Palgrave Macmillan Studies in Banking and Financial Institutions
• Reihe/Serie: Palgrave Macmillan Studies in Banking and Financial Institutions
• Zusatzinfo: XXI, 241 p.
• Verlagsort: Cham
• Sprache: englisch
• Themenwelt: Betriebswirtschaft / Management ► Spezielle Betriebswirtschaftslehre ► Bankbetriebslehre
• Schlagworte: Banking • Financial Reform • growth • Indian Financial Structure • Information Technology in Banking • M&A • Mergers and Acquisitions in India • Non-Performing Assets • Productivity • Profitability
• ISBN-10: 3-319-55663-0 / 3319556630
• ISBN-13: 978-3-319-55663-5 / 9783319556635