Profitability and Capital Adequacy Approach for Measuring Impact of Global Financial Crisis Vis-À-Vis Indian Banks

  • Dr.Manish Dadhich, Dr.Vineet Chouhan, Sanjay Kumar Gautam, Robert Mwinga, Dr. Rajesh Meena

Abstract

The technology driven banking system is the next leading edge that presenting risks as opportunities. Having considered the improvement in the comprehensive health of commercial banks, accounting-based indicators show wholesome financial performance. The study entails the financial performance(FP) of selected commercial banks(CB) of India for the period from 2015-19. The attempt comprises 20 commercial banks of India, the top 10 banks from the public and private sector each, based on their market capitalization and total asset value. The comprehensive financial analysis and their rejoinders to different financial risks(FR) i.e. credit risk and liquidity risks(LR) of selected banks are investigated. It is expected that the extent of banks getting affected by the global financial meltdown is largely depended upon cost and revenue mix. Therefore, banks always keep on changing the structure of their balance sheet to respond their understanding of financial and non-financial risks.

The global financial crisis has a profound effect on the balance sheet of the banking and non-banking financial institutions. Thus, it is pertinent to examines the prominent indicator i.e. analysis of profitability that comprises of return on net worth, net profit margin, net interest income/total fund, net profit/total fund, total income/capital employed, asset turnover ratio and analysis of capital adequacy- capital adequacy ratio, advances/loans funds, current ratio, net NPA to net advances by engaging the board data estimations. The outcome of ANOVA signifies that the general fiscal performance of private sector banks seems better than the public sector banks during the study period.

 JEL Code, G15, G21, G32, G33

 Keywords: Capital adequacy, Global crisis, asset instability, bank credit risk.

Published
2020-06-02
How to Cite
Dr.Manish Dadhich, Dr.Vineet Chouhan, Sanjay Kumar Gautam, Robert Mwinga, Dr. Rajesh Meena. (2020). Profitability and Capital Adequacy Approach for Measuring Impact of Global Financial Crisis Vis-À-Vis Indian Banks. International Journal of Advanced Science and Technology, 29(4s), 2346 - 2366. Retrieved from http://sersc.org/journals/index.php/IJAST/article/view/20177