IDEAS home Printed from https://ideas.repec.org/a/ids/ijbcrm/v3y2012i2p178-185.html
   My bibliography  Save this article

Determinants of credit risk in Indian banking sector: some panel results

Author

Listed:
  • Sah Bittu
  • Amit Kumar Dwivedi

Abstract

This paper empirically analyses fundamental factors affecting periodic addition to non-performing assets (NPAs or fresh slippage), taken as proxy for measuring credit risk, in Indian scenario. Panel regression on definitionally uniform data for five-year period, 2005-2009, on fresh slippage rate is performed for 70 banks to investigate variations on ownership dimension, aggressiveness, risk taking behaviour and performance of banks. The study indicates firstly, variations in fresh slippage is inversely related to efficiency of bank performance and directly related to capital-adequacy ratio, results being significant at 99% confidence interval; secondly, credit risk for foreign sector banks is higher than new generation banks for the given time period, result significant at 95% confidence interval. Standard Granger causality test based on quarterly fresh slippage data of a large public sector bank revealed that macroeconomic factor(s) - gross domestic product (GDP) has significant implication on credit risk management of banks - direction of causality established from GDP to NPA while no 'reverse causation' was observed.

Suggested Citation

  • Sah Bittu & Amit Kumar Dwivedi, 2012. "Determinants of credit risk in Indian banking sector: some panel results," International Journal of Business Continuity and Risk Management, Inderscience Enterprises Ltd, vol. 3(2), pages 178-185.
    • Handle: RePEc:ids:ijbcrm:v:3:y:2012:i:2:p:178-185
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=47064
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Biswajit PATRA & Puja PADHI, 2016. "Determinants of nonperforming assets-bank-specific and macroeconomic factors: A panel data analysis of different group of commercial banks operating in India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(609), W), pages 215-236, Winter.
    2. Kandela Ramesh, 2019. "Bad Loans of Public Sector Banks in India: A Panel Data Study," Emerging Economy Studies, International Management Institute, vol. 5(1), pages 22-30, May.
    3. Biswajit PATRA & Puja PADHI, 2016. "Determinants of nonperforming assets-bank-specific and macroeconomic factors: A panel data analysis of different group of commercial banks operating in India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(609), W), pages 215-236, Winter.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijbcrm:v:3:y:2012:i:2:p:178-185. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=333 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.