| Pub. Date | : April, 2023 |
|---|---|
| Product Name | : The IUP Journal of Corporate Governance |
| Product Type | : Article |
| Product Code | : IJCG010423 |
| Author Name | : Soumik Bhusan, Angshuman Hazarika and Naresh G |
| Availability | : YES |
| Subject/Domain | : Management |
| Download Format | : PDF Format |
| No. of Pages | : 29 |
The paper contributes to the literature by showing the progress made in deposit insurance and risk domain in the banking sector using a bibliometric approach. A conjoint study of deposit insurance and risk yields a broader view on the research trend progression. The analysis shows that niche themes around banking regulation, Prompt Corrective Action (PCA), and emerging markets have evolved. Banking regulations form a cornerstone of financial stability, with PCA progressively showing predominance, reflecting early warning signals of a possible banking failure while deposit insurance may be a key tool to prevent the impact of such failure from reaching the consumers, it does not improve the protection available to other stakeholders which presents a corporate governance challenge of balancing conflicting interests of different stakeholders in the banking system.
Depositors are a class of consumers who receive services from banks and deposit accepting financial institutions (Cartwright, 2004; Arun Bhatiya vs. HDFC Bank and Ors. (2022). Accepting deposits and providing loans have been considered as a key function of banks. Since depositors utilize the financial service of holding deposits provided by a bank, they have been considered by regulators as 'financial consumers' (SAMA, 2013; and RBI, 2015a). In an imperfect market, where information asymmetry and friction exist, banks create their own space by channelizing the surplus from savers to the borrowers. The value-addition performed by the banks in this process occurs when they play the role of delegated monitors on behalf of the depositors. Different regulatory bodies such as the central banks, financial protection bureaus, and a wide range of agencies protect depositor interests under consumer protection laws across the globe (Ardic et al., 2011). In the United States, the Federal Reserve even maintains a website to inform the individuals dealing with financial institutions about major consumer protection laws which may cover them (Federal Reserve Board, 2004).