Study on liquidity of Indian banks: an empirical analysis of scheduled commercial banks
by Anamika Singh; Anil Kumar Sharma
International Journal of Business Excellence (IJBEX), Vol. 15, No. 1, 2018

Abstract: We study the impact of profitability, net interest margin, non-performing assets, capital adequacy ratio, bank size, deposits and cost of funding on liquidity of Indian banks. To examine this relationship, we have taken annual data pertaining to 64 Indian banks from the period 2000 to 2014. Banks considered include all private, foreign and public sector banks operating in India from 2000 to 2014. Using fixed effect estimates, we find that capital adequacy ratio, deposits and profitability influence Indian bank liquidity positively while bank size, non-performing assets and net interest margin affect Indian bank liquidity negatively. Cost of funding does not affect liquidity of Indian banks significantly. Findings of our study have significant implications for bankers, policy makers and researchers advocating the relationship of liquidity and factors such as bank size, profitability, net interest margin, non-performing assets, capital adequacy ratio, cost of funding and deposits and highlighting the possible reason behind that. The study would help in appropriate policy formulation, decision making and maintaining adequate liquidity in the banking system.

Online publication date: Fri, 20-Apr-2018

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Business Excellence (IJBEX):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com