Do Managers of Mutual Institutions Choose Efficiency-Improving Mergers? The
Recent Experience of Japanese Credit Associations
--Nobuyoshi Yamori,
--Kozo Harimaya
Because of the unique corporate governance feature of mutual institutions, managers are expected to
maximize their own interests at the expense of other stakeholders' interests. However, this study finds that managers
of Japanese mutual banks do not behave as suggested.
© 2010 IUP. All Rights Reserved.
Modeling Money Attitudes
to Predict Loan Default
--Sunil Bhardwaj,
--Kaushik Bhattacharjee
The primary objective of the study is to classify the defaulters and non-defaulters of auto loans based on
their specific personality traits, viz., `money attitude' and `income dimensions'. However, the aim is not only
to classify, but also to understand the root of the defaulter behavior. Therefore, the study probes deeper into
the attitude and perception variables of the consumers who avail loan facilities. The study, based on the customers
of an MNC bank1, using a survey in two metropolitan cities in India, suggests that the constructs of personality
traits, such as money attitudes, power-prestige and anxiety, actually enhance the intention and actual usage of
loan facility, and that the same can be the predictors of default behavior at a significant level. The results and the
model developed can be used as the basis for decision making while processing loans.
© 2010 IUP. All Rights Reserved.
Profitability of Foreign Banks Operating in India:
A Multi-Discriminant Model
--V K Shobana and G Shanthi
Moving from the scenario that was dominated by nationalized banks, Indian commercial banking system
has witnessed a rapid spread of Foreign Banks (FBs). The operations of FBs have received a considerable boost
during the post-reform era beginning with the year 1993, providing opportunities for players to shape up and prepare
for their growth. This paper is an attempt to determine the profitability of FBs operating in India, using the data
for the period from 1996-97 to 2004-05. The study uses multi-discriminant function analysis to identify the
variables discriminating the high profitability bank groups from the low profitability groups.
© 2010 IUP. All Rights Reserved.
Effect of Size and Age
on the Performance of Indian Banks Under Different Ownership Forms
--Harsh Arora
A sound and effective banking system helps in the building of a healthy economy of a country. India is not
an outlier in this respect. The Indian banking sector has also undergone changes. These changes have given a
sound industrial structure in the country. Further, to strengthen the structure, the Indian government liberalized
the industry in the year 1991. This liberalization gave entry to many foreign players. It also helped many
domestic players to establish themselves in the industry. Today, all public sector and private sector banks (both Indian
and foreign) compete with each other. The main thrust of the paper is to find out how age and size of banks affect
their growth performance. The paper contributes to the existing literature in the area and encourages future research.
© 2010 IUP. All Rights Reserved.
Paradigm Shift in E-Banking:
Some Evidence from Indian Banks
--R K Uppal
The present paper examines the productivity and profitability in pre and post e-banking periods and highlights
the emerging issues and new strategies to enhance the performance of bank groups in today's liberalized,
globalized and IT era. The paper concludes that though there is a paradigm shift in the performance of all bank groups in
the post e-banking period, new private sector banks and foreign banks have an edge over Public Sector Banks
(PSBs). The fully IT-oriented banks have become both a threat and a motivation for the PSBs. The paper stresses
on customer-centricism, proficiency in managing assets, technology, skilled staff, transparency, human
resource management policies, customer relationship management, and merger and acquisition policies as vital factors
to enhance the performance of banks to face the emerging global competition.
© 2010 IUP. All Rights Reserved.
An Analysis of the Efficiency
of Private Sector Banks in India
--B S Bodla,
--Richa Verma Bajaj
This paper aims to examine the efficiency, benchmarks and targets for private sector
banks operating in India. Keeping in view the limitations of ratio analysis techniques,
production approach of Data Envelopment Analysis (DEA)
was applied to judge the efficiency of private sector banks. In this
model, banks are considered as service providers, and while
interest expenses, non-interest expenses and the Non-Performing Asset
(NPA) ratio, i.e., net NPAs to net advances, are considered
as input variables, deposits, advances and investments
are considered as the output variables. The paper
analyzes the efficiency of 29 private sector banks with the dataset ranging from
the period 1998-99 to 2005-06. The results of the study indicate that
there is a lot of scope for the private sector
banks to improve their efficiency level, as, at the most, only 31.25% private sector banks were found efficient during
the entire study period. The results indicate that
a majority of private sector banks in India need to take steps to
decrease the NPA level and improve their output
parameters, such as deposits, advances and
investments, because they have failed to acquire full efficiency score in all
the years under study.
© 2010 IUP. All Rights Reserved.
Potential for Mortgage Loan in India: A
Survey Among the Senior Citizens of Vadodara, Gujarat
--Vipin Desai
Reverse mortgage loan is a home loan product having its deep roots in western countries. As far as India
is concerned, the name formally figured in the Budget-2007 speech, in which the Finance Minister proclaimed
the government's intention to have this product launched as a social security measure for the senior Indian
citizens. The banks and other lending institutions were expected to offer this product. However, the present status of
the scheme does not reflect it having reached the expected level. Although some banks have announced the
scheme, the volume of sanctions and disbursements is not large enough. The popular discourse suggests that
Indians would not accept the said product due to their emotional attachment to the house, and their mindset
towards leaving a legacy behind them for their heirs. Do the banks, too, have apprehensions on these lines? Is it due
to such apprehensions that much publicity is not given after making formal announcements? This paper makes
an attempt to analyze these issues based on the data collected from the senior citizens and ascertain the
potentiality of the product by examining the substance and the scale of the said apprehensions, if any. The study is based
on a sample survey of senior citizens in Vadodara, Gujarat.
© 2010 IUP. All Rights Reserved.
Bank Selection Criteria Employed
by Customers in Labuan: A Study
--Nelson Lajuni,
--Bryan Lo Ching Wing,
--Mohd. Fahmi bin Ghazali
Banks, which aim to attract a vibrant segment of competitive market, must identify the criteria based on
which potential customers determine their bank selection decision. The study focuses on examining the bank
selection criteria preferred by Labuanese. Seven parameters, viz., image, services offered, influences, incentives,
security, conveniences, and the advancement of technology, were chosen to investigate the customers' attitude
towards selecting banks. A total of 200 questionnaires were distributed; however, only 185 questionnaires were
returned (54% male and 46% female) which served as the sample for the study. Respondents were selected
randomly; however, care was taken to choose only those who were working or had their own income, as they were
believed to possess the purchasing power to be in need of bank transaction. The study shows that Labuanese
preferred banks that could offer and promise efficiency, and a wide range of services, including
Automated Teller Machines (ATMs). They also gave preference to banks that were strictly regulated by the central bank and financially
stable with a strong brand name.
© 2010 IUP. All Rights Reserved.
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