| Pub. Date | : Nov, 2023 |
|---|---|
| Product Name | : The IUP Journal of Bank Management |
| Product Type | : Article |
| Product Code | : IJBM021123 |
| Author Name | : Deeksha and Kamlesh Rani |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 14 |
The financial sector is pivotal for any country's economic growth and stability. However, the detrimental effects of fraudulent activities pose a considerable obstacle to this progress. This study assesses the impact of fraudulent activities on the financial performance of private sector banks in India. The study employs an ex-post facto research design, and the data was collected from secondary sources, including annual reports of the banks in focus and reports from the Reserve Bank of India. The ordinary least squares regression technique ascertains the relationship between a bank's fraudulent activities and financial performance. The findings indicate that the monetary value associated with fraud has a significantly negative impact on the financial performance of the studied banks. Interestingly, the frequency of fraud, on the other hand, does not significantly impact the banks' financial performance. Banks and regulatory authorities must undertake initiatives to proactively detect and prevent fraud. Timely action is required to safeguard the financial system's integrity and protect stakeholders' interests.
The financial sector is the cornerstone of any economy, playing a pivotal role in fostering economic growth and stability. According to Singh (2005), as cited in Bhasin (2015), the Indian banking sector holds a special place in global banking history. Since India gained independence, its banking industry has undergone three distinct phases: from character-based lending to ideology-driven lending and, eventually, to lending driven by competitiveness. In the past decade, the Indian banking sector has demonstrated remarkable progress, characterized by accelerated credit growth, increased profitability and efficiency levels compared to banks in the advanced economies.