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Impact of Global Financial Crisis on Banking Sector of India and Jordan

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  • Baaeth Atallah Dalaien

Abstract

This study aims to find out the impact of global financial crisis on banking sector in Jordan and India. the descriptive analytical methodology was used. The study population includes all banks in each country (Jordanian and Indian). The study sample consists of seven banks in Jordan and seven banks in India. The study use variables which includes (Bank Share Price, Bank Capital Adequacy, bank Deposit- lending Ratio, Interest Rates, Nonperforming Assets). The study indicated that global financial crisis have a negative effect on share price of Jordanian banks because share price decrease after global financial crisis. The study also indicated that global financial crisis have a negative effect on capital adequacy, Deposit - Lending Ratio, and Non-Performing Assets because all of these variables was increase after global financial crisis. The study reported that global financial crisis have a positive effect on share price of Indian banks because share price increase after global financial crisis. The study also indicated that global financial crisis have a positive effect on capital adequacy because it increase after global financial crisis, but other indicators which includes Deposit - Lending Ratio, and Non-Performing effect negatively by global financial crisis because all of these variables was increase after global financial crisis. The study reported that performance of Jordanian Banks Sector goes in negative trends after global financial crisis such as; Share prices declining and nonperforming assets increasing, also the study reported that performance of Indian Banks Sector goes in negative trends after global financial crisis such as; Non-performing assets increasing and in positive trends after global financial crisis such as share prices increasing. The study recommended that Central Banks have to issue instructions to raise the minimum capital funds of local banks and continue to oblige banks to apply risk management at the macroeconomic level and at the level of the banking system.

Suggested Citation

  • Baaeth Atallah Dalaien, 2016. "Impact of Global Financial Crisis on Banking Sector of India and Jordan," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 2(1), pages 79-95, March.
  • Handle: RePEc:khe:scajes:v:2:y:2016:i:1:p:79-95
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    References listed on IDEAS

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    1. Al-Mashat Rania & Billmeier Andreas, 2008. "The Monetary Transmission Mechanism in Egypt," Review of Middle East Economics and Finance, De Gruyter, vol. 4(3), pages 32-82, September.
    2. Andrea Teglio & Marco Raberto & Silvano Cincotti, 2012. "The Impact Of Banks' Capital Adequacy Regulation On The Economic System: An Agent-Based Approach," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 15(supp0), pages 1-27.
    3. Kumar, Rajiv & Vashisht, Pankaj, 2009. "The Global Economic Crisis: Impact on India and Policy Responses," ADBI Working Papers 164, Asian Development Bank Institute.
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    5. Pomerleano, Michael, 2009. "What Is the Impact of the Global Financial Crisis on the Banking System in East Asia?," ADBI Working Papers 146, Asian Development Bank Institute.
    6. Mr. Tushar Poddar & Ms. Hasmik V Khachatryan & Miss Randa Sab, 2006. "The Monetary Transmission Mechanism in Jordan," IMF Working Papers 2006/048, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Global financial crisis; banks; share price; capital adequacy; deposit-lending; interest rates; non-performing assets;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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