Foreign banks in India: liabilities or assets?
AbstractUsing data on Indian banks for 1996-2007, the article examines the impact of foreign banks on the domestic banking sector. The analysis suggests that foreign bank penetration improves profitability and asset quality, although it dampens spreads. The results are robust to alternate measures of foreign bank presence. In addition, foreign banks appear to impact the maturity of credit portfolio of domestic banks. Finally, the results also support the fact that foreign banks typically charge lower interest rates as compared to domestic banks.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 39802.
Date of creation: Jun 2012
Date of revision:
Publication status: Published in Economic Papers 2.31(2012): pp. 225-243
foreign banks; non-performing loans; credit allocation; interest rates; India;
Other versions of this item:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-14 (All new papers)
- NEP-BAN-2012-07-14 (Banking)
- NEP-CWA-2012-07-14 (Central & Western Asia)
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