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Banking activities and natural disasters: empirical evidence from India

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  • Whelsy Boungou
  • Praveen Gupta

Abstract

This paper aims to analyse the impact of the 2001 Indian earthquake on the activity of banks. To that end, we use a dataset from 366 banks located in 141 cities in India over the period 1995–2007 and the Difference-in-Differences method. We observe that the natural disaster has affected the profit-earning assets of Indian banks. Specifically, we show that in response to this natural disaster banks have reduced the volume of loans and hold more securities in the earthquake-affected cities. Furthermore, we find a lower level of risk-taking by banks after the earthquake. In doing so, we provide the first evidence of Indian banks’ exposure to natural disasters.

Suggested Citation

  • Whelsy Boungou & Praveen Gupta, 2026. "Banking activities and natural disasters: empirical evidence from India," Applied Economics Letters, Taylor & Francis Journals, vol. 33(4), pages 581-587, February.
    • Handle: RePEc:taf:apeclt:v:33:y:2026:i:4:p:581-587
    DOI: 10.1080/13504851.2024.2384522
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