What is it about?
The study examines the impact of bank size, profitability, and ownership on excess capital for credit risk management (CRM) in Indian banks. Using data on 34 Indian banks from the year 2009 to 2016, the result suggest that large banks hold higher excess capital beyond the required minimum as per Basel norms.
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Why is it important?
This study assumes significance in the context of the ongoing debate on the need for stringent regulations and risk-based capital requirements for banks. The findings of the study will be of interest to Indian banks which have been implementing new Basel norms (Basel III). The study also has implications for regulators and policy makers who have been trying to address the problem of high and rising non-performing (loss) assets of Indian banks.
Perspectives
I hope this article would contribute to the existing conversations on the need for stringent regulations and risk-based capital requirements for banks. Further, this study would be of interest to regulators and policymakers across the world in the context of global financial crisis (2008) which emanated from the US mortgage market. Thus, an effective CRM system is a necessity for financial firms across the globe.
Dr Arunima Haldar
S.P. Jain Institute of Management and Research
Read the Original
This page is a summary of: An Empirical Examination of the Relationship between Credit Risk Management, Size, Profitability, and Ownership of Indian Banks, International Journal of Managerial and Financial Accounting, January 2021, Inderscience Publishers,
DOI: 10.1504/ijmfa.2021.10038073.
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