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Structure, Conduct and Performance Analysis of Indian Commercial Banks

Author

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  • Ratna Barua
  • Malabika Roy
  • Ajitava Raychaudhuri

Abstract

The market structure, conducts and performance of the Indian banking sector have changed since the introduction of banking sector reforms. Slower economic growth, coupled with asset quality problems in recent years, has taken a toll on the overall health of the Indian banking sector. Higher statutory capital requirement under Basel III has posed another major challenge to the Indian banks. The purpose of the study is to examine the impact of structural changes and conduct of Indian commercial banks on their profitability in the paradigm of structure–conduct–performance (SCP) framework. Market concentration, bank-specific/macroeconomic variables have been considered as important determinants of the profitability. The regression results find a negative relationship between profitability and market concentration and reject SCP hypotheses. The study found that capitalization, credit risk, leverage and ownership structure are the most important determinants of the profitability of Indian banks. The study also found that financial crisis had no significant impact on the profitability of Indian banks. JEL Classification: C4, G21, G28, L19

Suggested Citation

  • Ratna Barua & Malabika Roy & Ajitava Raychaudhuri, 2016. "Structure, Conduct and Performance Analysis of Indian Commercial Banks," South Asian Journal of Macroeconomics and Public Finance, , vol. 5(2), pages 157-185, December.
    • Handle: RePEc:sae:smppub:v:5:y:2016:i:2:p:157-185
    DOI: 10.1177/2277978716671042
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    References listed on IDEAS

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    Cited by:

    1. Muhamad Nadratuzzaman Hosen & Sabrina Fitria, 2018. "The Performance of Islamic Rural Banks in Indonesia: 2010-2015," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 423-440.

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    More about this item

    Keywords

    Profitability; concentration; credit risk; efficiency; capitalization; panel data;
    All these keywords.

    JEL classification:

    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other

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