The determinants of profitability of Indian commercial banks: A panel data approach

What is it about?

Abstract The current study examines the determinants of profitability of Indian com- mercial banks. The analysis is conducted over a period of 10 years in which the Indian banking sector has gone under different changes such as demone- tization and issues related to banking sector sustainability and banking sector frauds. The analysis is based on balanced panel data over a period ranging from 2008 to 2017 for 69 commercial Indian banks. Profitability of Indian banks is measured by two proxies, namely, return on assets (ROA) and return on equity (ROE), whereas bank size, assets quality, capital adequacy, liquidity, operating efficiency, deposits, leverage, assets management, and the number of branches are used as bank‐specific factors. Further, a set of macroeconomic determinants such as gross domestic product, inflation rate, interest rate, exchange rate, financial crisis, and demonetization are used as independent variables.

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Very unique study in India

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