ICTACT Journal on Management Studies

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An Exploratory Analysis on the Impact of Institutional-Specific Cum Macroeconomic Indicators on the Non-Performing Assets of SBI and Associate Banks in India


Affiliations
1 School of Management Studies, Bannari Amman Institute of Technology, India
2 School of Commerce, PSG College of Arts and Science, India
     

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The research aims at analyzing the influence of 5 industry-specific and 4 macroeconomic factors on the non-performing assets of SBI and Associate Banks in India by collecting the relevant data for a period of 10 years ranging from 2006-07 to 2015-16. The results of multiple correlation analysis ensured the positive correlation between Repo Rate (RR), Reverse Repo Rate (RRR), Unemployment Rate (UR) and Non-Performing Assets (GNPATA) whereas the variables such as Capital Adequacy Ratio (CAR), Cash Reserve Ratio (CRR) Prime Lending Rate (PLR), Money Supply (MS) and Gross Domestic Product Growth Rate (GDPGR) showed a negative impact on the non-performing assets. The Granger Causality Test confirmed the association of CAR, CRR, RRR, IR, MS, UR and GDPGR with the non-performing assets whereas the remaining variables such as PLR and RR portrayed a negative relationship with the non-performing assets. Further the Johansen Co-integration Test results witnessed that all the institutional-specific and macroeconomic variables are co-integrated with the non-performing assets of SBI and Associate Banks in India.

Keywords

Institutional-Specific, Macroeconomic, Non-Performing Assets, SBI, Associate Banks.
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  • An Exploratory Analysis on the Impact of Institutional-Specific Cum Macroeconomic Indicators on the Non-Performing Assets of SBI and Associate Banks in India

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Authors

S. Gokul Kumar
School of Management Studies, Bannari Amman Institute of Technology, India
M. Jayanthi
School of Commerce, PSG College of Arts and Science, India
K. Subramani
School of Management Studies, Bannari Amman Institute of Technology, India
A. Prasanth
School of Management Studies, Bannari Amman Institute of Technology, India

Abstract


The research aims at analyzing the influence of 5 industry-specific and 4 macroeconomic factors on the non-performing assets of SBI and Associate Banks in India by collecting the relevant data for a period of 10 years ranging from 2006-07 to 2015-16. The results of multiple correlation analysis ensured the positive correlation between Repo Rate (RR), Reverse Repo Rate (RRR), Unemployment Rate (UR) and Non-Performing Assets (GNPATA) whereas the variables such as Capital Adequacy Ratio (CAR), Cash Reserve Ratio (CRR) Prime Lending Rate (PLR), Money Supply (MS) and Gross Domestic Product Growth Rate (GDPGR) showed a negative impact on the non-performing assets. The Granger Causality Test confirmed the association of CAR, CRR, RRR, IR, MS, UR and GDPGR with the non-performing assets whereas the remaining variables such as PLR and RR portrayed a negative relationship with the non-performing assets. Further the Johansen Co-integration Test results witnessed that all the institutional-specific and macroeconomic variables are co-integrated with the non-performing assets of SBI and Associate Banks in India.

Keywords


Institutional-Specific, Macroeconomic, Non-Performing Assets, SBI, Associate Banks.

References