Ownership concentration and its influence on transparency and disclosures of banks in India

Bhimavarapu, Venkata Mrudula; Rastogi, Shailesh; Kanoujiya, Jagjeevan

doi:10.1108/cg-05-2021-0169

Cited by 22 publications

(12 citation statements)

References 164 publications

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“…Companies' disclosure policies and procedures have a positive and significant effect on success of banking and other financial organisations (Bhimavarapu et al, 2023;Cerciello et al, 2023). The vast majority of academics are of opinion that better disclosure procedures contribute to better business performance (Nobanee & Ellili, 2022).…”

Section: Empirical Studiesmentioning

confidence: 99%

“…The vast majority of academics are of the opinion that better disclosure procedures contribute to better business performance (Nobanee & Ellili, 2022). Companies' disclosure policies and procedures have a positive and significant effect upon success of banking and other financial organisations (Bhimavarapu et al, 2023;Cerciello et al, 2023). The primary goals of this research were to analyze factors that affect banking sector performance.…”

Section: Introductionmentioning

confidence: 99%

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Analysis of Banking Performance Over Corporate Governance, Risk Management and Disclosure Practises

Abbas

Hussain²,

Khan³

2023

GUJR

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Primary goal of this study was to examine how several factors, including disclosure practices, risk management, and corporate governance, affect the growth of Pakistan's financial services sector. The design of study was based on a positivist paradigm, and quantitative research methods were used. In this type of cross-sectional research, primary method of collecting data was a survey, and findings of that survey were examined after they were collected. In order to carry out this investigation, researchers used a method known as simple random sampling. A standard questionnaire was used in order to gather information from managers of the many branches of the banking sector. The results suggest that improvements in corporate governance are responsible for improvements in the performance of the banking industry. Data revealed that increased corporate disclosure leads to improved overall performance in banking industry. In conclusion, the findings verified that efficient methods of risk management are directly responsible for the increased performance of the banking industry. In the instance of Pakistan, empirical data pertaining to financial institutions is of very low quality. Study offers evidence that formal corporate governance and disclosure practises in banking are critical to the success of businesses in the service industry.

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Section: Empirical Studiesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Analysis of Banking Performance Over Corporate Governance, Risk Management and Disclosure Practises

Abbas

Hussain²,

Khan³

2023

GUJR

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“…In the present scenario, it is a prerequisite for the government to bring transparency, accountability and good performance from the banking industry to protect the interest of various stakeholders. India, being a major economy in the SAARC, still endures the agony of the deteriorating banking system due to the event of demonetization followed by the Covid-19 pandemic, which proved to be the black swan for the already reeling industry (Akhtar et al , 2023; Bhimavarapu et al , 2023). While targeted interventions have already been implemented by the Government of India (GoI) and Reserve Bank of India (RBI), a prolonged disruption may require further initiatives facilitating structural changes in the industry.…”

Section: Introductionmentioning

confidence: 99%

Do Indian banks perform better in corporate governance than other SAARC nations? An empirical analysis

Alam,

Akhtar,

Al-Faryan

2023

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Purpose This paper aims to investigate the role of corporate governance on the bank profitability of Indian banks vis-à-vis South Asian Association for Regional Cooperation (SAARC) nations. Design/methodology/approach For the Corporate Governance Index, the authors examined board accountability, transparency and disclosure and audit committee, while Tobin’s Q, return on equity and return on assets are used to measure the bank’s profitability. The study used a two-stage analysis based on balanced panel data for robust findings. Sample of this study consists of 60 commercial banks from India and 60 banks from SAARC nations for the period of 2009–2021. This study used panel regression and a generalized method of moment approach using the CAMELS framework on banking industry-specific variables to determine their respective impacts. Findings The findings of this study suggest that board accountability is positive and significantly affects the profitability of banks as indicated by return on assets, return on equity and Tobin’s Q. In contrast, the audit committee has a positive and insignificant impact on return on assets, return on equity and Tobin’s Q, while transparency and disclosure have a negative and significant impact on these metrics. Furthermore, the country dummy result shows a significant positive impact on all the bank performance parameters, implying that Indian banks have the highest degree of convergence with corporate governance as compared to other SAARC nations. Research limitations/implications This study provides insight to the regulators, policymakers and financial institutions to evaluate the role of corporate governance in emerging economies. However, the findings of the study should be interpreted with caution, as the results are sensitive to the disparity between India and other SAARC nations' government policies, climatic circumstances and cultural or religious traditions. Originality/value To the best of the authors’ knowledge, this is the first attempt to gauge the performance of Indian banks vis-à-vis SAARC nations using the CAMELS framework approach. Further, findings of this study suggest some novel evidence tying corporate governance quality with the profitability of banks among SAARC nations.

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“…This study considers the extent of promoters' ownership by the proportion of equity shares held by promoters, i.e. shareholding (Mishra and Kapil, 2017; Jawade, 2021; Bhimavarapu et al. , 2022).…”

Section: Introductionmentioning

confidence: 99%

Does promoters' ownership reduce the firm's financial distress? Evidence from non-financial firms listed in India

Kanoujiya

Singh

Rastogi

2022

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PurposeOwnership concentration (OC) is an essential element of corporate governance (CG) for a firm's performance. The purpose of the study is to investigate the connectivity of OC (particularly considering promoters' holdings) with the firm's financial distress (FD) of non-financial firms (NFF) listed in India.Design/methodology/approachThe panel data regression analysis (applying quantile regression for the 25th quantile, 50th quantile, and 75th quantile) is employed to inspect the connection between OC (promoters' holdings) and the firm's FD (computed using Altman Z-scores). The data for a cross-section of 78 listed firms (non-financial) in India, considering the time frame of five years (2015–16 to 2019–20), are cumulated for the study. The leverage (leverage ratio), competition (Lerner index), valuation (mcap), sales, and profitability (net profit margin) variables are incorporated as control variables.FindingsThe study's findings reveal that OC (promoters' holdings) positively relates to the firm's FD because OC negatively associates with Zscore (as Zscore is inverse to FD). Additionally, the non-linear association also indicates positive connectivity of OC and Zscore (a U shape association), alternatively showing a negative non-linear connection of OC (promoters' holdings) with the firm's FD (inverse U shape association). This result implies that initially, promoters' holdings enhance the firm's FD, and after a maximum threshold, promoters' holdings start reducing FD in non-financial listed firms in India. The findings also show an interesting aspect of OC at different quantiles. The results indicate that a higher OC is powerful when distress is both high and low to achieve stability. Conversely, less OC among promoters is required to achieve such stability when the distress is medium (50th quantile).Research limitations/implicationsThe scope of the study is limited to NFFs listed in India, which is one of the limitations of the present paper. Hence, this does not provide evidence for financial firms. Only one aspect of OC (promoters' holdings) is considered in the current study. However, OC can also be explored for FD in terms of institutional and retail investors. These limitations can be considered as the present study's future scope.Originality/valueMost of the studies regarding OC have explored the broader aspect of OC. However, the current study has narrowed the OC to promoters' holdings. No other study exclusively examines the association of OC (as promoters' holdings) with the firm's FD. Promoters' holdings have a more significant role in a firm's CG practices because of direct involvement of promoters' holdings in business activities. Thus, the present study's findings have notable implications for managers, policymakers, and investors concerned with the financial health of firms.

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Ownership concentration and its influence on transparency and disclosures of banks in India

Cited by 22 publications

References 164 publications

Analysis of Banking Performance Over Corporate Governance, Risk Management and Disclosure Practises

Analysis of Banking Performance Over Corporate Governance, Risk Management and Disclosure Practises

Do Indian banks perform better in corporate governance than other SAARC nations? An empirical analysis

Does promoters' ownership reduce the firm's financial distress? Evidence from non-financial firms listed in India

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