Categorizing the Variables Influencing the Creditworthiness of Bank Borrowers: Some Survey Evidence for Ethiopia

-- A S Kannan and S Sudalaimuthu

Commercial banks thrive on credit granting decisions and need to carefully assess the creditworthiness of the potential borrower before granting credit. The banks are interested in identifying the factors which highly influence the borrower’s creditworthiness. This study intends to categorize and label the variables into major component-factors that influence the creditworthiness of the borrowers. The results reveal that borrower’s status and performance, borrower’s personality and relationship with branch, and collateral quality are the main factors that influence the creditworthiness of the borrowers. The study is significant as it breaks new ground in Ethiopian commercial bank lending.

© 2016 IUP. All Rights Reserved.

United Bank of India: A Strategic Analysis Using the Vrio Method

-- Roshni Das

In recent times, huge accumulation of losses to public sector banks in India has caused widespread public concern. In February 2014, the Chairperson and Managing Director of the United Bank of India (UBI) put in her papers amidst a massive ongoing crisis of the bank in the form of a net loss of 1,683 cr in the first nine months of the financial year 2013-14. It was a case of chronic mismanagement and lack of vision. Despite being headless, the bank managed a turnaround in the January-March period with a quarterly net profit of 470 cr. This paper undertakes a detailed qualitative, strategic and financial examination of the events and structures that led to UBI’s huge accumulation of losses and then, by adopting the Resource-Based View (RBV) theoretical framework (Barney et al., 2001), attempts to come up with workable recommendations on how to make it a viable business again. Key competencies of the bank have been identified by the VRIO method and detailed solutions are offered to rejuvenate the bank.

© 2016 IUP. All Rights Reserved.

A Comparative Analysis of the Operating Efficiency of Indian Scheduled Commercial Banks

-- Yashpal Singh

The objective of this paper is to analyze the operating efficiency of Indian scheduled commercial banks, using the data released by the Reserve Bank of India. For analyzing the performance of banks, various statistical methods such as average, standard deviation, standard error, lower bound and upper bound were used. In addition, ANOVA test was applied at 95% level of confidence for testing significant difference amongst the cost of fund, return on fund and operational efficiency through SPSS software. The study reveals that cost of fund of all the scheduled commercial banks was significantly different. Since the cost structure is different for the same work, it implies that the operational efficiency caused the difference and the foreign banks emerged as the most efficient financial institutions, followed by private and public sector banks. However, it was also observed that the difference was not significant in the case of return on advance, return on investment and return on fund. Moreover, foreign banks were found to be most efficient, followed by private sector and public sector banks.

© 2016 IUP. All Rights Reserved.

Productivity and Efficiency of Public Sector Banks in India After the Global Financial Crisis

-- Manoj Kumar Das and Subhamitra Patra

A productive and efficient banking industry plays a vital role in financial intermediation for accelerating the economic growth. In recent years, the competition among public sector, private sector and foreign banks has increased tremendously in India. This paper aims to study the change in the productivity and efficiency of Public Sector Banks (PSBs) in India after the financial crisis of 2008. Non-parametric Data Envelopment Analysis (DEA) approach is used to study the productivity and efficiency change of 26 PSBs operating in India. The results show that there is a wide variation of productivity and efficiency change among PSBs, and a few PSBs are suffering from deterioration of efficiency, which requires special remedial policy approach.

© 2016 IUP. All Rights Reserved.

Research Note
Investors’ Perception Towards Equity Share Investment: A Study with Reference to Mangalore City, Karnataka

-- Vishal Pinto

© 2015 IUP. All Rights Reserved.