Search results

Every shock, starting from the banking sector reform in 1992 to the global crisis due to Covid-19 pandemic, affects the performance of banks. The shocks and transformations jeopardise the bank’s performance. This study cover period of 30 years starting from 1992. So, the reason behind taking only public sector banks is that after 1991–92 many banking sector reforms took place, and many new private sector banks and foreign sector banks entered into competition due to the liberalization, privatization, globalization (LPG) policy. So, it has been difficult for public sector bank to manage their performance in a competitive market. So, the purpose of this study is to find out influencing factors of bank performance especially public sector bank, because, it has been vital to identify factors influencing their performance.

The current study explores the determinant of the performance of public sector banks in India. Currently, in India, 12 banks are public sector banks, which capture 59.8% market share in the banking industry. After 1994 new licences were issued by Reserve Bank of India for many banks, and foreign sector banks entered the market as an effect of LPG policy, and market competition is one of the significant determinants of the performance of banks. Thus, the panel regression model is used to analyse the impact of various determinants on the performance of public sector banks (from 1992 to 2021). Return on equity and return on assets are used as indicators of performance, whereas influencing factors are divided into two parts, bank-specific factors, which include bank size, asset quality (AQ), liquidity, credit deposit ratio (CDR), capital adequacy, debt-equity ratio, employee’s productivity and macroeconomic factors which include inflation rate, tax rate and gross domestic product (GDP).

Results of the study show that bank size is not an essential factor for measuring bank performance because it is insignificant with both indicators of performance. AQ, liquidity ratio and CDR are significant in both models with negative impact. Macroeconomic factors like GDP are insignificant with both indicators with positive relations and tax rates are significant with a positive relationship. The inflation rate is significant but affects negatively to performance.

This study only focuses on public sector banks. So, the results for private and foreign sector banks might differ. Considering the larger market share compared to other sector banks, the authors are focusing on public sector banks only. Foreign banks and cooperative banks are not included current analysis because of huge numbers and different working environments.

Determining influencing factors of bank performance is crucial because it will help the bank take various policy implications and formulation. Since independence measuring bank performance are important area.

The purpose of this paper is to explore how the different dimensions of service quality influence customers’ behavioural intentions in the private and public sector banks, that is, in class and mass banking, respectively, and the implications for the service provider, consumer, society and consumer policy.

A contextually modified SERVQUAL instrument was used to capture customers’ perceptions of service quality followed by exploratory factor analysis to study the dimensionality of service quality in retail banking. Multiple regression was used to probe the influence of the dimensions of service quality on customers’ behavioural intentions.

The study revealed four dimensions of service quality in retail banking, namely, customer-orientedness, reliability, tangibles and convenience and showed that the service quality factor customer-orientedness comprising of the responsiveness and attitude of employees is most important in influencing customers’ behavioural intentions in the case of private sector banks and reliability of the service is most influential in the case of public sector banks.

Future research can focus on “service excellence” being extended beyond assessment of the quality of services, towards evaluation of the quality of life outcomes, to which public organizations contribute, appraisal of the quality of public governance processes and quality of performance in meeting social objectives.

Retail bank managers must realize the importance of employees providing competent, reliable service in the case of public sector banks and their responsiveness and behaviour towards customers in the case of private sector banks, as the keys to foster a culture of service excellence.

High-quality financial consumer policy must not only be able to increase customer satisfaction with financial services but also build security and trust in public administration through transparent processes and accountability. In this context, with public agencies being regarded as service providers and citizens as customers, the concept of quality must also visualize public agencies as catalysts of a responsible and active civic society.

This study explores the relationship between service quality and customers’ behavioural intentions in the private and public sector banks by linking both constructs at their dimensional level. It highlights major implications for the service provider, society, consumer and public policy based on the different needs, characteristics and requirements of customers of class and mass banking, that is, private and public sector banks.

This paper aims to analyze, using the bank-level data for India from 1991-2007, the effect of financial sector liberalization on the availability of credit to the private sector. The authors specifically ask whether public and private banks deployed resources freed up by reduced state preemption to increase credit to the private sector.

The authors use bank-level data for India from 1991-2007 and difference in difference estimates to analyze how state ownership of banks affected the allocation of credit to the private sector post liberalization, and additionally how the size of fiscal deficit affected this allocation.

The authors find that post liberalization, public banks continued to allocate a larger share of their assets to government securities, or held more cash, than private banks. Crucially, public banks allocated more resources to hold government securities when fiscal deficit was high. The authors rule out profit maximization, need to hold safer assets or the lack of demand for private credit as the possible reasons for the preference of the public banks to hold government securities. The authors suggest that moral suasion or “laziness” is consistent with this behavior.

Our findings suggest that in developing countries, with fewer alternative channels of financing, government ownership of banks, combined with high fiscal deficit, may limit the gains from financial liberalization.

In the present competitive scenario in the Indian banking industry, service quality has become one of the most important facets of interest to academic researchers. The purpose of this paper is to determine the dimensions of perceived service quality and investigate their impact on customer satisfaction in the Indian banking context, with special reference to selected public sector banks in India.

On the basis of the empirical study, the authors validate a measurement model using structural equation modeling for investigating the impact of perceived service quality dimensions on customer satisfaction. The study sample consists of 480 respondents in the National Capital Region (NCR) of India; the data were collected through a structured questionnaire utilizing a seven-point Likert scale while implementing a purposive sampling technique.

The perceived service quality dimensions identified were tangibility, reliability, assurance, responsiveness, empathy, and image. The empirical findings revealed that “responsiveness” was found to be the most significant predictor of customer satisfaction. On the other hand, “image” (corporate image) has a positive but the least significant relationship with customer satisfaction followed by all other constructs. The exception is “reliability,” which is insignificantly related to customer satisfaction in Indian public sector banks.

The study cannot be generalized in the context of Indian banking sectors, as it only focused on the public sector. The findings of this study suggest that the six dimensions of perceived service quality model are a suitable instrument for evaluating bank service quality for public banks in India. Therefore, bank managers can use this model to assess the bank service quality in the context of Indian public sector banks.

There is dearth of research focusing on corporate image as a dimension of perceived service quality and its effect on customer satisfaction in the Indian banking context. Furthermore, similar studies were rarely found in the Indian context, especially within the public banking sector. Hence, this paper attempts to accomplish the research gap by empirically testing the satisfaction level of a large sample of the population in NCR toward six dimensions of perceived service quality rendered by selected public sector banks in India.

Low cost financing in establishing economical development is very important. At this point, financial intermediaries provide great contributions to economic development by eliminating asymetrical information problem between lender and borrower. It is possible to see capital market in anglo‐saxon countries and banking system in Europe and Japan mostly from historical dimension. However, long term financing is done through capital market in most developed countries at present. It is a common characteristic in countries such as Turkey, Chile and Mexico whose economies are financed by banking system. Singh and Weisse (1998), suggests that it is because of late industrialisation 1. Developing countries are generally those where there is less capital. Therefore attracting both internal and external savings into the banking system (for these countries) is very important from economical development point. At this point, powerful banks are preferred by the investors. Because the possibilty of failure is low (for these banks) 2. The most important factor that effects banks risk structure is public’s role. Because public can effect banks risk structure both at macro and micro level. Public’s influence on bank’s risk structure at macro economic level is due to general economical structure. If the general economic structure has high volatility and is away from consistency, this situation will increase the risk for banking sector. On the other hand, fiscal dominance is one of the main problems especially in developing countries. Fiscal dominance caused by lack of enough public revenue affects banking sector negatively. Thus, a goverment which can not prepare the macro economic environment where banks can function at high productivity will increase banks’ risks. In addition, banks require strict regulations and controlling as its structure is open to fraud. That these regulations are ignored or not prepared will lead to risk accumulation in the sector. It becomes a social responsibility of the state to take necessary cautions as these kinds of issues change a large cost on the society. Within this framework, the aim of our study is to examine public’s role on fragilities in banking sector. These examinations will be conducted for Turkey which experienced a collapse in banking sector in the recent period. In the first and second part of our study, public’s influence on the sector at macro and micro level will be examined. Experiences gained through Turkey example will be presented in the conclusion.

The purpose of this paper is to examine the effect of service quality, perceived price and fairness and service convenience on customer satisfaction. It also aims to compare multiple regression models between public and new private sector banks.

A cross‐sectional research on 445 retail banking customers through a questionnaire is conducted. The population of the study consists of valued retail urban customers of banks in Rajasthan, India, who frequently visit bank premises for transactions, have accounts in at least two banks and have availed of at least one information technology based services. Responses are analysed using regression analyses.

Dimensions of service quality are employee behavior, tangibility and information technology. Dimensions of service convenience are decision convenience, access convenience, transaction convenience, benefit convenience and post‐benefit convenience. For public sector banks, except tangibility, all antecedents have positive impact on customer satisfaction. For private sector banks except tangibility and benefit convenience all antecedents have positive impact on customer satisfaction. Significant difference in beta coefficient is found between public and private sector banks regarding employee behavior, decision convenience, access convenience and post‐benefit convenience.

This study has taken into account a specific category of retail banking customers. Thus, it limits generalization of results to other banking populations.

This study highlights the importance of service quality, service convenience and price in satisfying customers. Bank managers can focus on these factors to satisfy customers.

The paper emphasizes the significance of service quality, price and SERVCON on customer satisfaction for Indian banking sector. It compares the multiple regression models for public and private sector banks.

Purpose: Worldwide economies have been shattered by the alarming increase in Non-Performing Assets (NPAs) in Banking Sector. In India, the rise in NPA levels gives a clear insight into the health of industry and state. This study aims to determine how NPAs in India impact the profitability of eight banks chosen from the public and private sectors; specifically: Punjab National Bank (PNB), Bank of India (BOI), UCO Bank, Punjab and Sind Bank (PSB), HDFC Bank, Axis Bank, ICICI Bank, and Yes Bank; during the period 2009/2010 to 2017/2018.

Design/methodology/approach: The study utilised IBM SPSS version 20 application to carry out our statistical analysis of measures of central location (mean and median), measures of dispersion (standard deviation), to carry out the Kolmogorov–Smirnov test to check the normality of data, the Mann–Whitney U test (for two groups) for median comparison between private and public sector banks and the Kruskal–Wallis test (for more than two groups) for median comparison for more than two banks. p ≤0.01 and p ≤0.05 were the two-tailed significance level used for determining the significance of all statistical tests.

Findings: Trend analysis and statistical tests show that the trend in public sector banks to have NPAs is higher compared to private sector banks, and losses arising from NPA impact the banks’ profitability.

Practical implications: It is apparent that NPAs are a large threat to banks in India as it reflects the state of the Indian economy. The growth of the economic cycle is predominantly dependent on the smooth and profitable functioning of private and public sector banks. This current study focusses on and compares the impact of NPAs on the profitability of public and private sector banks. NPAs have grown exponentially more in the case of public sector banks than private sector banks, which has affected the former banks’ financial health and performance. Increases in the level of NPAs adversely affect the working style and long-term stability of public and private sector banks in the economy.

Social Implications: NPAs have a negative influence on the profitability of the banks as well as on the economic growth of the country too. However, it is recommended that management in the banking sector, particularly the public banks, should use various preventive and recovery strategies to reduce the risk of failure and to keep track of NPAs to stay safe.

Originality/value: This study aims to determine how NPAs in India impact the profitability of eight banks chosen from the public and private sectors; specifically: PNB, BOI, UCO Bank, PSB, HDFC Bank, Axis Bank, ICICI Bank, and Yes Bank; during the period 2009/2010 to 2017/2018.

The banking industry faces increasing scrutiny from stakeholders regarding its environmental and social impacts, given its crucial role in fostering economic growth. Banks have been encouraged to adopt environmental, social and governance (ESG) practices to mitigate risks and safeguard their reputation. However, the effectiveness of ESG sensitivity within the banking industry is contingent upon ownership and structural factors. The extent to which banks can integrate ESG considerations into their operations and decision-making processes may vary based on their ownership structures. Therefore, this study aims to examine if the impact of ESG on the performance of Indian banks varies between private and public sector banks.

The study employs six years of panel data from two separate samples of 12 private sector banks and 10 public sector banks in India. It utilises fixed and random effect estimation techniques with robust standard errors to derive accurate and reliable econometric results.

The main findings of this study reveal intriguing insights into the relationship between ESG factors and bank performance, considering the influence of ownership structure. For private sector banks, the ESG composite score, particularly the social dimension, negatively impacts financial performance. However, there is a contrasting positive effect on efficiency. In contrast, public sector banks demonstrate a positive and significant association between the environmental score and return on equity and non-performing assets.

The findings highlight the need for tailored strategies that align with ownership structure to achieve sustainable financial and societal outcomes in the banking industry. Furthermore, it emphasises the need for private-sector banks to streamline their ESG initiatives, especially in the social dimension, to mitigate negative impacts on their financial performance.

This study introduces a novel dimension by addressing the “one size fits all” bias in prior research that overlooked bank ownership differences when examining the impact of ESG factors on bank performance.

By using Latour’s notion of “action at a distance” (Latour, 1987), the purpose of this paper is to examine the ways in which the government acts at a distance to achieve corporate governance of public sector banks, and the extent to which accounting enables such actions of the government.

This study follows the qualitative research approach and adopts the case study research method. A major public sector bank in Sri Lanka was selected as the case organization for this study. Data were gathered from semi-structured interviews with organizational participants and document study.

The study provides evidence to suggest that inscriptions produced through four areas of accounting, namely external reporting, external auditing, management accounting and internal auditing, have the capacity to develop strong explanations enabling action at a distance and good corporate governance in the case organization. The study also provides evidence to show how the role of accounting in long-distance control and corporate governance in the case organization is influenced by various contextual factors. In particular, the study finds that undue government interference over the case organization to gain the long-distance control have resulted in deteriorating the level of corporate governance.

The findings support the literature that examines the accounting in its social context.

The findings suggest that actors should be allowed to operate independently, particularly without political expedience and undue influences from pressure groups, which ensure effective utilization of accounting inscriptions by the actors in long-distance control as well as good corporate governance of public sector banks.

Although research into accounting in public sector organizations has gained considerable importance in recent times, those studies examining public sector banks are still lacking. The paper aims to fill this gap.

The purpose of this paper is to explore the preparation level of Indian public sector banks for the implementation of Basel III. It is mandatory for public sector banks in India to make adequate preparations to comply with the Basel III international regulations.

This study uses a modified questionnaire (Ernst & Young, 2013; AL-Tamimi et al., 2016) to examine the preparedness level of Indian public sector banks for implementing Basel III. Seven hypotheses are developed and tested.

The results show that Indian public sector banks are positively inclined toward Basel III, and the awareness level of Indian banks’ managers is adequate concerning Basel III. The banks have required resources for the proper implementation of Basel III, which is a prerequisite for its implementation. Banks know about the expected benefits that can be attained from implementing Basel III appropriately and banks are also aware of the high cost attached with Basel III. The capital adequacy ratio of public sector banks is above 11 percent, showing the banks’ readiness for Basel III.

The public sector banks need to concentrate on revising the existing policies to sharpen their risk management practices. Moreover, improving the level of education on Basel III is still required and the results also support the importance of advanced technology and trained human resources at all level as a basic requirement for the implementation of Basel III. It can be achieved by the support of government, Reserve Bank of India (RBI) and other concerned agencies. The enforcement of Basel III will also create various challenges for Indian public sector banks, in terms of declining profitability, increasing capital requirements and nonperforming assets. That is why the impact of Basel III norms on Indian public sector banks cannot be undervalued.

The findings would assist the Indian public sector banks to know about their preparedness level for Basel III and what are the necessary actions to encourage Basel III implementation process. The present study would be important for regulators and decision makers in banks, as the main purpose of this study is to increase their awareness of Basel III norms. The result would also help the regulators regarding the corrective measures that should be taken by RBI in order to motivate the banks for enforcing Basel III.