How did state-owned banks respond to privatization? Evidence from the Indian experiment
AbstractThe paper examines the response of banks to privatization. Using data on all state-owned banks for the period 1990-2006, the findings indicate that fully state-owned banks are significantly less profitable than partially privatized ones. The improvements in performance by partially privatized banks are, in fact, sustained after privatization. In addition, the analysis indicates that privatization improves profitability, efficiency and improves bank soundness, while lowering bank risk. While the improvement in bank risk is typically spread out over a much longer period, the progress in terms of profitability and economic efficiency typically occurs in the post-privatization period.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 24716.
Date of creation: Sep 2010
Date of revision:
Banking; Partial privatization; Non-performing loans; Capital adequacy ratio; India;
Other versions of this item:
- Saibal Ghosh, 2010. "How Did State-Owned Banks Respond To Privatization? Evidence From The Indian Experiment," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 81(3), pages 389-421, 09.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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