An analysis of NPAs of Indian banks: Using a comprehensive framework of 31 financial ratios
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RAVI aNSHUMAN V. IIMB Management ReviewSummary: The study examines panel data for 46 Indian banks with 31 bank specific financial ratios over eight years (2007 to 2014). Together, these ratios reflect operating capability, liquidity, solvency, profitability, capital adequacy and business development capacity aspects across Indian banks that affect non-performing assets (NPAs). The data was analysed using a GMM model that dealt with endogeneity issues present in the data. This model captured NPA with an r-square of 85%. We find a negative significant relationship between intermediation cost ratio, Return on Assets and NPAs. Asset growth, lagged NPAs, and total liabilities by total assets are positively related to NPAs.
| Item type | Current library | Call number | Vol info | Status | Notes | Date due | Barcode | Item holds | |
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Journal Article
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Main Library | Vol 31, Issue 1/ 55510416JA4 (Browse shelf(Opens below)) | Available | 55510416JA4 | |||||
Journals and Periodicals
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Main Library On Display | JRNL/GEN/Vol 31, Issue 1/55510416 (Browse shelf(Opens below)) | Vol 31, Issue 1 (30/07/2018) | Not for loan | March, 2019 | 55510416 |
The study examines panel data for 46 Indian banks with 31 bank specific financial ratios over eight years (2007 to 2014). Together, these ratios reflect operating capability, liquidity, solvency, profitability, capital adequacy and business development capacity aspects across Indian banks that affect non-performing assets (NPAs). The data was analysed using a GMM model that dealt with endogeneity issues present in the data. This model captured NPA with an r-square of 85%. We find a negative significant relationship between intermediation cost ratio, Return on Assets and NPAs. Asset growth, lagged NPAs, and total liabilities by total assets are positively related to NPAs.
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