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Welcome to the IUP Journal of Monetary Economics
February '12

Previous Issues

The IUP Journal of Monetary Economics* is a quarterly economics journal focusing on macroeconomic policy issues, money markets, monetary standards and regimes, government and monetary system, monetary policy and central banking, monetary policy designs and consistency, stabilization policy.

*Indexed by the London School of Economics.

  • Macroeconomic Policy Issues
  • Money Markets
  • Monetary Standards and Regimes
  • Government and the Monetary System
  • Monetary Policy and Central Banking
  • Central Banks and Their Policies
  • Monetary Policy Designs and Consistency
  • Stabilization Policy
Non-Performing Assets of Commercial Banks: A Case Study
Savings, Investment and Economic Growth in Nigeria: An Empirical Analysis
Inflation Targeting and Economic Stability in East Asian Countries
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(February 2012)

Non-Performing Assets of Commercial Banks: A Case Study

-- Rosy Kalra

Non-Performing Assets (NPAs) in the Indian banking system have assumed astronomical dimensions through the introduction of the concept of asset classification, income recognition and provisioning norms by Reserve Bank of India to assess the credit risk of a bank. High level of NPAs in banks has attracted public as well as foreign financial institutions to analyze the reasons for it. In this paper, an attempt has been made to find out the various factors responsible for the huge NPAs. Further, the different characteristics of NPAs on the basis of industry and area (i.e., state-wise as well as region-wise) have been analyzed.

Savings, Investment and Economic Growth in Nigeria: An Empirical Analysis

-- Ben Obi, Gobna Obida Wafure and Auta Elisha Menson

This paper empirically examines the relationship among savings, investment and growth rate using cointegration and Error Correction Model (ECM) approach. Specifically, savings and investment models are estimated. The series are integrated of order two, i.e., [I(2)]. Long-run relationship among variables is established using Johansen maximum likelihood methods. The econometric analysis shows that investment-GDP ratio lagged by one year, real growth rate of GDP lagged by one year, gross domestic savings lagged by one year and cost of capital lagged by two years are significant determinants of investment. Similarly, real growth rate of GDP, gross domestic investment-GDP ratio lagged by one year and economic liberalization are significant determinants of savings. A robust relationship among savings, investment and growth is identified. The study suggests that given the prevalence of low saving rate and invariably low investment rate, there is the need to adopt a proactive measure that will enhance savings and investment capacity in Nigeria, which in turn, will impact growth significantly. This can be achieved through a policy framework that will ensure an investor-friendly environment and develop human capacity and technology.

Inflation Targeting and Economic Stability in East Asian Countries

-- G Babu Rao

The present study empirically investigates the success of inflation targeting in reducing inflation uncertainty in East Asian countries, especially South Korea, the Philippines and Thailand. An attempt is made to examine whether inflation targeting has any impact on inflation variability in the countries adopting inflation targeting in East Asia. The study makes use of monthly data on Consumer Price Index. The study period spans from January 1970 to May 2010. This provides a rich dataset for the analysis, but some of the indices were introduced recently. The present study has undertaken a comprehensive set of econometric techniques, such as unit root tests, parametric tests (autocorrelation and variance ratio tests) and ARCH-GARCH tests. Towards this end, empirical results of parametric tests provided largely show inflation uncertainty. Finally, the study concludes that inflation targeting has good impact in reducing inflation variability and improving economic growth in South Korea, the Philippines and Thailand.



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Automated Teller Machines (ATMs): The Changing Face of Banking in India

Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.

The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario

If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.

Indian Scenario

The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.