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Foreign Banks in India: Liabilities or Assets?

  • Saibal Ghosh

Using 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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File URL: http://hdl.handle.net/10.1111/j.1759-3441.2011.00143.x
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Article provided by The Economic Society of Australia in its journal Economic Papers.

Volume (Year): 31 (2012)
Issue (Month): 2 (06)
Pages: 225-243

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Handle: RePEc:bla:econpa:v:31:y:2012:i:2:p:225-243
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  1. Williams, Barry, 2003. "Domestic and international determinants of bank profits: Foreign banks in Australia," Journal of Banking & Finance, Elsevier, vol. 27(6), pages 1185-1210, June.
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