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Financial
Intermediation under Reforms in India:
Evidences from Scheduled Commercial Banks
-- J Dennis Rajakumar
The
importance of a financial system in the development process
of an economy has been extensively dealt within the paper.
Since Scheduled Commercial Banks, in India, have nearly three-fourth
of the total financial assets of all financial institutions,
they have a cardinal role to play in the development process
of the economy. This paper examines whether their intermediation
has improved, subsequent to initiation of sector reforms since
1991. Evidence found by the paper suggests improvement in
the intermediation process under reform, which supports the
view that removal of control would improve the allocative
efficiency of banks. Such an improvement has to be, however,
appreciated against the observed backdrop of declining credit-deposit
ratio; declining share of productive sectors like agriculture
and industry, and manufacturing in particular, in total bank
credit; and a corresponding increase in the share of personal
loans and finance. The paper concludes by pointing out the
need for further improvement in the intermediary role of banks
in terms of financing productive sectors in the economy.
© 2005 IUP. All Rights Reserved.
Private
Sector Banks in India - A
SWOT Analysis
--
Chowdari Prasad and K S Srinivasa Rao
The
financial reforms launched during the early 1990s have dramatically
changed the banking scenario in the country. New prudential
norms, such as capital adequacy prescriptions, identification
of bad debts, provision requirements, etc., were enforced;
and interest rates were deregulated. As a sequel to these
reforms, new private sector banks were allowed entry into
the market. Many of these new private sector banks have brought
with them state-of-art technology for business processing
and service delivery, besides being efficient in catering
to the customers demands. Yet, the failure of Global Trust
Bank made Indian depositors to question the sustainability
of private banks. Against this backdrop, this article attempts
to undertake SWOT analysis and other appropriate statistical
techniques, to rank 30 private sector banks from the financial
data collected for the three years2002, 2003 and 2004. The
study has, using four parametersefficiency, financial strength,
profitability, and size and scale, ranked the banks independently
for each year.
© 2005 IUP. All Rights Reserved.
`CAEL'
Ratings and its Correlation to Pricing Stocks - An Analysis
of Indian Banks
--
Sheeba
Kapil and K N Kapil
The
objective of this paper is to assess the relationship between
the CAMEL ratings and the bank stock performance. The viability
of the banks has been analyzed on the basis of the Off-site
Supervisory Exam ModelCAMEL Model (C for Capital Adequacy,
A for Asset Quality, E for Earnings, L for Liquidity). The
M for Management has not been considered in this paper because
all Public Sector Banks, (PSBs) are government regulated,
and also because all other four componentsC, A, E and Lreflect
management quality. The remaining four components have been
analyzed and rated to judge the composite rating. Part A of
the study analyzes the interbank performance by determining
their CAEL composite score. Part B of the study assesses the
relation between the banks' composite CAMEL ratings with the
banks' stock performance. The paper finds that the Off-site
Supervisory Exam Model, CAMEL, is related to the banks' stock
performance in the capital market. The private supervisory
information gathered by bank examiners in the form of CAMEL
ratings does filter into the financial markets, in spite of
the fact that they are confidential and not disclosed to the
public. The findings of this study will be important in the
context of the banking reforms being undertaken, especially,
the government's plan to consolidate the banking industry,
i.e., future bank mergers and acquisitions. On the basis of
our findings, the paper argues the disclosure of the bank
supervisory information like CAMEL ratings, to facilitate
correct pricing of the bank stock.
© 2005 IUP. All Rights Reserved.
A
Study on the Level of Customers' Satisfaction on
Various Modes of Banking Services in India
-- S
Shajahan
The
Indian banking industry is on a major technological upgradation
drive after having successfully absorbed the international
standard in its operating norms. A study was conducted by
the author, based on 100 account holders of ICICI Bank in
Chennai recently, for portraying their varying levels of satisfaction.
To control the response bias and to increase the reliability
of the data, a structured pattern of questions was also used
during a descriptive survey research. Statistical tests were
employed for the data analysis using SPSS. The Discriminant
Analysis, which emerged out of the study findings, explicitly
takes a logistic form that is typical of adoption behavior
of new Internet-based banking services, which enhances the
level of satisfaction among bank customers. Further, the Discriminant
Equation, designed by the author, signifies shifts in the
levels of satisfaction from the basic banking services to
special electronic data-based services, and also predicts
accurately the frequency of visiting the site for various
requirements. The author is of the opinion that Internet literacy
(as measured by the penetration of Internet usage in a country)
is the major factor underlying online banking penetration
in India.
© 2005 IUP. All Rights Reserved.
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