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Determinants of Credit Risk in Indian State-owned Banks: An Empirical Investigation

  • Das, Abhiman
  • Ghosh, Saibal

The determinants of credit risk of banks in emerging economies have received limited attention in the literature. Using advanced panel data techniques, the paper seeks to examine the factors affecting problem loans of Indian state-owned banks for the period 1994-2005, taking into account both macroeconomic factors as well as microeconomic variables. The findings reveal that at the macro level, GDP growth and at the bank level, real loan growth, operating expenses and bank size play an important role in influencing problem loans. The study performs certain robustness tests of the results and discusses several policy implications of the analysis.

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File URL: http://mpra.ub.uni-muenchen.de/17301/1/MPRA_paper_17301.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17301.

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Date of creation: Sep 2007
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Publication status: Published in Economic Issues 2.12(2007): pp. 48-66
Handle: RePEc:pra:mprapa:17301
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Web page: http://mpra.ub.uni-muenchen.de

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