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Determinants of Credit Risk in Indian State-owned Banks: An Empirical Investigation

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  • Das, Abhiman
  • Ghosh, Saibal

Abstract

The determinants of credit risk of banks in emerging economies have received limited attention in the literature. Using advanced panel data techniques, the paper seeks to examine the factors affecting problem loans of Indian state-owned banks for the period 1994-2005, taking into account both macroeconomic factors as well as microeconomic variables. The findings reveal that at the macro level, GDP growth and at the bank level, real loan growth, operating expenses and bank size play an important role in influencing problem loans. The study performs certain robustness tests of the results and discusses several policy implications of the analysis.

Suggested Citation

  • Das, Abhiman & Ghosh, Saibal, 2007. "Determinants of Credit Risk in Indian State-owned Banks: An Empirical Investigation," MPRA Paper 17301, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17301
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    More about this item

    Keywords

    credit risk; banking; state-owned banks; India;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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