Soumya Kanti Ghosh & Tapas Kumar Parida
The paper analyses the relationship between bank competition and financial stability based on 55 major nationalised and private sector banks in India for the period 2007-08 to 2017-18. The paper hypothesizes that with rising degree of competition among credit institutions, risk taking activities (to capture new markets and improve profitability) will increase which may hamper financial stability of the banks. The study measures the competition in the banking sector by three indices (HHI, CR3, CR5, CR10 and GRS) and financial stability of individual banks by the scores of Solvency Risk (as measured by Individual Bank-level Non-Performing Loans or GNPLs) and Credit Risk (as measured by Bank-level Z-score or ZS). Based on the literature, we have taken into consideration the GRS index value as the best index to measure the market concentration in the market (Parida and Acharya; 2016). As the results, reveal, the GRS index varies in the range of 0.15-0.18, which indicate that the Indian banking sector is less concentrated but the index value is showing an upward trend, indicating that the level of competition is reducing. So, there is a need for RBI to look the trend carefully and try to foster regulation in the sector, which will push competition and bring efficiency in the sector. The study runs panel regressions where dependent variables are solvency risk and credit risk and independent variables are level of competition (based on market share of individual banks) (MS), size of the banks (total assets) (SIZE), Net Interest Margin (NIM), interest rate (IR), WPI inflation (WPI), GDP growth rate (GDP) and ownership structure (GOWN: Public or Private). The study finds that SIZE and GOWN have negative and significant impact on Credit Risk (Z Score / ZS), whereas all other variables (viz., NIM, MS, IR, WPI, GDP) have positive significant impact on Credit Risk (ZS). However, MS, IR and GDP have negative and significant impacts on Solvency Risk.
B H Nanwani & Yogesh D Mase
The study presents a comparative statistical analysis of Stressed Assets (SAs) in Indian Scheduled Commercial Banks including Public, Private and Foreign Banks. Stressed Assets (SAs) is among the few best indicators of the health and performance of the banking industry and primary indicators of credit risk. The findings throw light on the magnitude of the stressed assets problem with various reason and indicate need for concerted efforts to control the same.
Bibekananda Panda & Sara Joy
Technology offers enormous potential and opportunities to the Indian Banking sector. Rapid technological diffusion and entry of non-banking entities like fintechs, bigtechs and e-retailers into financial space have left no scope for Indian banks to delay and deny technological innovations. Given massive technological disruptions in Indian Banking, it is difficult to directly assess the contribution of technology to the performance and profitability of Indian banks. The technology-driven value proposition has eased the process of banking service requirements of customers. The study has administered a survey to understand the customers' acceptability of the new banking technologies. It is seen that customers' demand for convenient and omnichannel seamless services has increased in recent years. Despite the strong rise of the digital footprint of Indian banks, customers prefer human interaction over machines. Although technology is considered as a great customer-centric enabler for banks to induce innovation, from customers' point of view, it is not the technology that fascinates them, rather the security and personalised services. As Indian banking has now moved to a new era where investment in competitive and innovative technologies is a new reality, banks need to create public awareness about these latest technologies and handhold the customers to adapt to the digital journey through personalised services with a human touch.
Somayya Madakam & Sreekanth Kollu
The research article is based on literature – which describes principles of "Blockchain Technologies". The research is exploratory in nature due to contemporary phenomena across the world. Hence, the study comes under qualitative research. The data have been collected from various secondary online resources. The data were collected during 1/1/2018 - 31/6/2018. The data is in text, pictures, audio, and video formats. The google, google scholar, EBSCO, knimbus and other scientific databases were used for investigating the data. All articles have come across; and content analysis done. The final report based on thematic narration technique; is written after the content analysis. The research pointed out that "Blockchain Technologies" is gradually changing the way we do business. Specifically, all the traditional financial transactions will be disrupted by this new technology. The blockchain technologies will bring in the efficiency in financial transaction irrespective of native of personal, official and business operations. There will be transparency, cost reduction in operations, full security, and non-mediatory financial transactions. The cryptocurrencies like bitcoin, ripple, blackcoin, zcash, and other cryptocurrencies will drive transactions across the globe. The smart contracts, proof-of-work, mining, and digital signatures plus hash techniques are base for blockchain technologies.
IFRS 9 and CECL Credit Risk Modelling and Validation –A Practical Guide with Examples in R and SAS
Academic Press, Elsevier, London, UK, 2019, 316 pp, £145.00
Reviewed by Dr Arindam Bandyopadhyay, Editor, Prajnan, National Institute of Bank Management, Pune.