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Determinants of the exit decision of foreign banks in India

  • Swami, Onkar Shivraj
  • Vishnu Kumar, N. Arun
  • Baruah, Palash
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    There is hardly any study in the existing literature regarding the foreign banks’ exit decision in India. This study tries to identify the CAMEL (i.e., C=Capital adequacy, A=Asset quality, M=Management decision, E=Earning ability and L=liquidity) variables that could qualify as the determinant of foreign banks closing their business operations in India which entered after the financial sector reforms. Logistic Regression Model was used to identify the risk factors associated with the closure of business-operation of foreign banks in India. It seems that foreign banks with higher non-performing assets (NPAs), lower return on equity and lesser profit per employee were more likely to close their business in India than otherwise.

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    File URL: http://mpra.ub.uni-muenchen.de/38722/1/MPRA_paper_38722.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38722.

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    Date of creation: 10 May 2012
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    Publication status: Published in Ushus Journal of Business Management 1.10(2011): pp. 1-16
    Handle: RePEc:pra:mprapa:38722
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