Financial Sector Reforms in Developing Countries: The Indian Experience

Arun, Thankom; Turner, J.D.

doi:10.1111/1467-9701.00440

Cited by 40 publications

(25 citation statements)

References 24 publications

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“…The details on various reform measures and their impact on the structure of Indian banking industry has been well documented. In this context, reference may be made to the works of Sen and Vaidya (1997), Hanson and Kathuria (1999), Arun and Turner (2002), Shirai (2002), Bhide et al (2002), Yoo (2005), Hanson (2005), Reddy (2005), and Roland (2008). However, a brief discussion on the areas in which reforms have been introduced is presented here.…”

Section: Banking Reforms In Indiamentioning

confidence: 99%

Trends of cost efficiency in response to financial deregulation

Gulati

2015

Benchmarking: An International Journal

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Access to this document was granted through an Emerald subscription provided by emeraldsrm:198285 [] For AuthorsIf you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to examine the trends of cost efficiency (CE) of Indian banks in response to financial deregulation programme launched in early 1990s. More specifically, the findings of this paper offer empirical testing of the basic underlined hypothesis that the CE of banks will rise in the more liberal and competitive environment. Design/methodology/approach -The study employs input-oriented data envelopment analysis (DEA) models that incorporate the quasi-fixed inputs to compute the cost, technical, and allocative efficiency scores for individual banks. The unbalanced panel data spanning from the financial year 1992-1993 to 2007-2008 are used for obtaining efficiency measures. In addition, the panel data Tobit model has been applied to investigate the bank-specific factors explaining variations in the CE. Findings -The empirical findings pertaining to the trends of efficiency measures suggest that: first, deregulation programme has had a positive impact on the CE of Indian banks, and the observed increase in CE is entirely due to improvements in technical efficiency (TE); second, the ranking of ownership groups provides that public sector banks are more cost efficient along with the foreign than private banks; and third, there is a strong presence of global advantage hypothesis in the Indian banking industry. The results of post-DEA analysis reveal that size and exposure to off-balance sheet activities are the key determinants of CE. The results also support the existence of bad luck or bad management hypothesis in Indian banking industry. Practical implications -The practical implication of the research findings is that the financial deregulation programme seems to be successful in achieving the CE gains in the Indian banking industry. This explicitly signals that the cautious approach of banking reforms adopted by Indian policy makers has started bearing fruit in terms of the creation of an efficient banking system, which is immune to any sort of financial crisis, and resilient to both internal and external shocks. Originality/value -Th...

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Section: Banking Reforms In Indiamentioning

confidence: 99%

Trends of cost efficiency in response to financial deregulation

Gulati

2015

Benchmarking: An International Journal

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“…The details on various reform measures and their impact on the structure of the Indian banking industry have been documented. In this context, reference may be made to the works of Sen and Vaidya (1997), Hanson and Kathuria (1999), Arun and Turner (2002), Shirai (2002), Bhide et al (2002), Yoo (2005), Hanson (2005), Reddy (2005), and Roland (2008). However, a brief discussion on the areas in which reforms have been introduced is presented here.…”

Section: Banking Reforms In India: An Overviewmentioning

confidence: 99%

Did efficiency of Indian public sector banks converge with banking reforms?

Kumar

Gulati

2008

Int Rev Econ

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“…Therefore, the question in this case is whether or not the government can credibly commit that it won't expropriate private capital owners. For instance, in India, the partial divestment of public sector banks has not brought about any significant changes in the quality of corporate governance mechanisms (Arun and Turner, 2002b). Despite a decade of financial reforms in India, the Government has still a major role in appointing members to bank boards.…”

Section: Thementioning

confidence: 99%

Corporate Governance of Banks in Developing Economies: concepts and issues

Arun¹,

Turner²

2004

Corporate Governance

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This paper discusses the corporate governance of banking institutions in developing economies. This is an important issue given the essential role that banks play in the financial systems of developing economies and the widespread banking reforms that these economies have implemented. Based on a theoretical discussion of the corporate governance of banks, we suggest that banking reforms can only be fully implemented once a prudential regulatory system is in place. An integral part of banking reforms in developing economies is the privatisation of banks. We suggest that corporate governance reforms may be a prerequisite for the successful divestiture of government ownership. Furthermore, we also suggest that the increased competition resulting from the entrance of foreign banks may improve the corporate governance of developing-economy banks. Copyright Blackwell Publishing Ltd. 2004.

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Financial Sector Reforms in Developing Countries: The Indian Experience

Cited by 40 publications

References 24 publications

Trends of cost efficiency in response to financial deregulation

Trends of cost efficiency in response to financial deregulation

Did efficiency of Indian public sector banks converge with banking reforms?

Corporate Governance of Banks in Developing Economies: concepts and issues

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