ICTACT Journal on Management Studies

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Impact of Bank Specific Determinants on Net Interest Margin: Empirical Evidence from Public and Private Sector Commercial Banks in India


Affiliations
1 School of Management Studies, Bannari Amman Institute of Technology, India
2 Department of Business Administration, Jamal Mohamed College, India
     

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This empirical study critically examines the linkage between net interest margin of 43 public and private sector banks and bank specific determinants for the period 2002-2003 to 2013-2014. The study aims to find the association between Net Interest Margin (NIM) and bank specific determinants with the help of statistical tools such as descriptive statistics, multiple correlation analysis and multiple regression analysis. The analytical results confirmed the statistically significant relationship between net interest margin of public and private sector banks and bank specific factors such as return on investment, operating profits to total assets, provisions and contingences to total assets and burden to total assets ratios.

Keywords

Net Interest Margin to Total Assets, Public and Private Sector Commercial Banks, Return on Investment, Multiple Regression Analysis.
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  • Jesus Gustavo Garza-Garcia, “What Influences Net Interest Rate Margins? Developed Versus Developing Countries”, Banks and Bank Systems, Vol. 5, No. 4, pp. 32-41, 2010.

  • Arvid Raknerud, Bjorn Vatne and Ketil Johan Rakkestad, “How do Banks Funding Costs Affect Interest Margins?”, Norges Bank Working Paper, pp. 1-38, 2011.

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  • Mirna Dumicic and Tomislav Ridzak, “Determinants of Banks Net Interest Margin in Central and Eastern Europe”, Financial Theory and Practice, Vol. 37, No. 1, pp. 1-30, 2013.

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  • Pamuji Gesang Raharjo, Dedi Budiman Hakim, Adler Hayman Manurung and Tubagus N.A. Maulana, “The Determinant of Commercial Banks Interest Margin in Indonesia: An Analysis of Fixed Effect Panel Regression”, International Journal of Economics and Financial Issues, Vol. 4, No. 2, pp. 295-308, 2014.


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  • Impact of Bank Specific Determinants on Net Interest Margin: Empirical Evidence from Public and Private Sector Commercial Banks in India

Abstract Views: 223  |  PDF Views: 0

Authors

P. Arun Prakash
School of Management Studies, Bannari Amman Institute of Technology, India
A. M. Mohamed Sindhasha
Department of Business Administration, Jamal Mohamed College, India

Abstract


This empirical study critically examines the linkage between net interest margin of 43 public and private sector banks and bank specific determinants for the period 2002-2003 to 2013-2014. The study aims to find the association between Net Interest Margin (NIM) and bank specific determinants with the help of statistical tools such as descriptive statistics, multiple correlation analysis and multiple regression analysis. The analytical results confirmed the statistically significant relationship between net interest margin of public and private sector banks and bank specific factors such as return on investment, operating profits to total assets, provisions and contingences to total assets and burden to total assets ratios.

Keywords


Net Interest Margin to Total Assets, Public and Private Sector Commercial Banks, Return on Investment, Multiple Regression Analysis.

References