A Holistic Perspective on Bank Performance Using Regulation, Profitability, and Risk-Taking with a View on Ownership Concentration

Abstract

There is a lack of a holistic perspective on bank performance. This study proposes a multidimensional (three-pronged) approach encompassing regulation, profitability, and nonperforming assets (NPAs) and their interactions as a measure of the performance of a bank. Moreover, the impact of equity holdings of promoters, institutional investors, and retail investors on the proposed three-pronged approach of the bank performance are also explored. Values of the concerned variables were gathered from 2016 to 2019. The dynamic panel data method was applied to empirically test the proposed model. The main findings supported the premises of the proposed approach to bank performance. Furthermore, various ownership classes provided mixed results for their impact on bank performance. Unfavorable roles of promoters and institutional investors and an indifferent role of the retail investors group were startling outcomes of the study. Successful empirical endorsement of the proposed approach for bank performance provides a fresh perspective and has varied policy- and managerial-level implications. The findings regarding various shareholder groups (ownership classes) can be a catalyst to set the policy for ownership distribution in banks, as well as shareholder protection and activism, which are conspicuously absent in India.

Dividend and Bank Performance in India: Evidence using Panel Data Analysis

“…This study is an attempt to understand the issue of dividend policy viz-a-viz bank performance in India. NPA is one of the indicators of the bank performance [28]. We believe that the problem of dividend policy in banks can be understood well by finding the association between dividend pay out and NPA.…”

Impact of Digitalization on the Farmers in India: Evidence using Panel Data Analysis

“…FI obviously also caters to them in more than one ways [26]. The impact of FI on the well-being of unbanked people, poor people or rural people is well documented [69], [60], [31], [71], [70], [4], [58]. However, the impact of digitalization in the financial services and its impact is relatively less researched area [62], [59].…”

“…The additional challenge in bringing the technology to the forefront of the unbanked people is ease of use and cost [14], [20]. In India, Open Banking provides a workable solution to the problem in bringing technology to the unbanked people successfully [63], [62], [60]. This study is aimed at assessing the impact of technology (digitalization in financial services) on the wellbeing of the farmers.…”

Financial Technology and Its Impact on Poverty in India

“…There have been substantial advancements in financial sustainability, efficiency, and the use of financial technology [19]. Governments, academicians, and financial analysts worldwide have recognized FT and FI as a crucial tools for poverty reduction, job creation, and rising economic growth and living standards, contributing to economic growth [53]. FT and FI's high degree of effect in affluent nations remains a driving force for its adoption and implementation in countries in alleviating poverty [1], [12], [15] Digitalization frequently focuses on individuals who switch from one form of financing to another [38], [65] FT and FI do not imply that everyone should take advantage of the availability [32], [54].…”