Geographical diversification and bank performance: evidence from Indian banks

Sharma, Shweta; Anand, Anand

doi:10.1108/ijppm-01-2019-0049

Cited by 8 publications

(8 citation statements)

References 42 publications

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“…The Indian banking sector was predominated by the public sector banks, but postliberalization, several private sector banks and foreign banks have intruded the Indian banking industry (Bhuyan et al , 2021; Kaura et al , 2015; Manohar et al , 2019; Sharma and Anand, 2020; Sharma and Sharma, 2019). As a result, competition has intensified and the only way to outperform competitors is by providing top-notch services to customers (Kaura, 2013; Manohar et al , 2019; Roy et al , 2016).…”

Section: Theoretical Framework and Hypothesis Developmentmentioning

confidence: 99%

“…Moreover, customers' perception with regard to antecedents of customer satisfaction might not be the same beyond cultures (Kaura et al , 2015; Sharma and Anand, 2020); therefore, applicability of these antecedents is questionable to a certain extent in other settings. A major limitation of the study is that it contemplated the perception of only those customers who physically visited the bank branch/ATM, but the perceptions of customers availing online banking services were not disclosed.…”

Section: Conclusion and Future Researchmentioning

confidence: 99%

“…This sector is marked by its top-notch services and high customer involvement (Chauhan et al , 2019; Kaura, 2013). Globalization had a considerable influence on the Indian retail banking sector and paved way for the private sector and foreign banks in India (Bhuyan et al , 2021; Goswami and Gulati, 2021; Kaura et al , 2015; Kundu and Banerjee, 2021; Manohar et al , 2019; Roy et al , 2016; Sharma and Anand, 2020). It further triggered intense competitiveness in the banking sector; thus, customer satisfaction has become the epicenter of all activities (Bhatt, 2020; Chauhan et al , 2019; Manohar et al , 2019).…”

Section: Introductionmentioning

confidence: 99%

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Augmenting bank service quality dimensions: moderation of perceived trust and perceived risk

Biswas

Jaiswal

Kant

2021

IJPPM

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PurposePermeation of private sector banks has triggered intense competitiveness in the Indian banking sector; therefore, customer satisfaction has become the epicenter of all activities. The study seeks to explicate the antecedents and reverberation of customer satisfaction in the Indian retail banking sector.Design/methodology/approachTop six Indian private sector banks were selected based on market capitalization. Cross-sectional data from 460 retail bank customers were collected by employing a structured questionnaire and evaluated wielding structural equation modeling.FindingsThe study discerns seven antecedents of customer satisfaction, namely tangibility, reliability, empathy, responsiveness, assurance, perceived service innovation and bank reputation. The results unveil that assurance, bank reputation and perceived service innovation significantly escalate customer satisfaction, which further markedly accentuates customer loyalty. However, tangibility was the only dimension bearing an insignificant relationship. In addition, both perceived trust and perceived risk significantly moderate the association between customer satisfaction and customer loyalty in the model.Research limitations/implicationsIncorporation of merely private sector banks and considering cosmopolitans restraints generalization of findings to some extent. The study bespeaks essential determinants of customer satisfaction that might succor bank professionals to retain customers and ameliorate profitability.Originality/valueThere is a paucity of literature on “perceived service innovation” and “bank reputation” in the Indian banking scenario. Therefore, the study augments the literature by integrating aforesaid important constituents along with other antecedents and reverberation. Moreover, the study uses theoretical lens to anchor its hypotheses through a comprehensive conceptual model in the backdrop of Indian retail banking.

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Section: Theoretical Framework and Hypothesis Developmentmentioning

confidence: 99%

Section: Conclusion and Future Researchmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Augmenting bank service quality dimensions: moderation of perceived trust and perceived risk

Biswas

Jaiswal

Kant

2021

IJPPM

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“…In the Indian context, Sharma and Anand (2019) observed that geographic diversification increases banks' returns but has no impact on risk. However, Deb and Sen (2016) found that, in India, geographic diversification decreases returns, and public sector banks are more diversified than their private sector counterparts.…”

Section: Literature Reviewmentioning

confidence: 99%

Are Banks in India Diversified Enough, Geographically, Across States and Economic Sectors?

Reddy

2021

Review of Development and Change

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This article, the first of its kind for the Indian economy, constructs lending environment portfolios of economic activities that banks in India have been faced with, for four Indian banking groups based on the extent of their operations in terms of their deposit shares in each state and the lending-portfolio mix of economic activities in those states. For empirical analysis, data on seven components of gross domestic product and state gross domestic product for 29 states from 1980–1981 to 2016–2017 were taken. The results reveal that the portfolio variances (risk) of the bank groups have declined in the last three decades. Compared to domestic private banks, the State Bank of India group and nationalised banks seem to have significantly reduced their environmental portfolio variability. Simulations to grasp the reasons for this geographic risk reduction show that structural economic reforms introduced in the early 1990s seem to have contributed more than changes in the banking structure in reducing the portfolio risk of banks.

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“…Earlier researchers promote the benefits of geographical diversification based on two competing theories. First, theory based on the delegated monitoring argument originates from the traditional banking literature suggests that a well-diversified organization is an optimal one [Sharma, Anand, 2020]. Being lack of modern risk management instruments, many theorists and practitioners recommend diversification as one of the easiest and most efficient ways to minimize risks.…”

Section: Introductionmentioning

confidence: 99%

Impact of Geographical Diversification on Credit Risk of Microfinance Organizations in Armenia

Mkhitaryan¹

2023

HSE Economic Journal

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This paper analyzes the existence of relationship between credit risk and the geographical diversification of financial institutions, originating from emerging countries. Due to economic unstable situation in the world caused by Covid-19, credit portfolios of banks and MFIs caused negatively which in some situations can lead to default. In the current situation, it became necessary to discover new approaches to credit risk management and new researches to be done. For this purpose, financial indicators of MFIs operating in Armenia were evaluated and Pearson analysis of MFIs data, risks & profitability efficiency calculation was made to take out impact of diversification of MFIs on credit risk reduction. Both international literature and practical data of MFIs operating in Armenia were identified. Another research was made for taking out the number of branches and credit risk correlation. Our findings show that geographic diversification is statistically significant with the expansion of gross loans. In contrast, empirical results suggest that the geographical diversification of MFIs does not have a significant correlation with the size of the credit risk reserve, which means that the representation of MFIs in different regions in the form of branches will not always lead to credit risk reduction, and in some cases may lead to operational risks and additional costs. We adopt cost funding and assets size variables impact assessment evaluation through instrumental variables method. Our results confirm the endogenous nature of those variables with risk level of MFIs.

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Geographical diversification and bank performance: evidence from Indian banks

Cited by 8 publications

References 42 publications

Augmenting bank service quality dimensions: moderation of perceived trust and perceived risk

Augmenting bank service quality dimensions: moderation of perceived trust and perceived risk

Are Banks in India Diversified Enough, Geographically, Across States and Economic Sectors?

Impact of Geographical Diversification on Credit Risk of Microfinance Organizations in Armenia

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