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Foreign banks in India: liabilities or assets?


  • Ghosh, Saibal


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.

Suggested Citation

  • Ghosh, Saibal, 2012. "Foreign banks in India: liabilities or assets?," MPRA Paper 39802, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:39802

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    Cited by:

    1. Saibal Ghosh, 2016. "Foreign banks in MENA countries: how important? How relevant?," Journal of Economic and Administrative Sciences, Emerald Group Publishing, vol. 32(1), pages 77-98, May.
    2. repec:fau:fauart:v:67:y:2017:i:6:p:492-511 is not listed on IDEAS

    More about this item


    foreign banks; non-performing loans; credit allocation; interest rates; India;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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