Title: Determinants of bank credit by commercial banks in India

Authors: Shveta Singh; Rohtash Bhall; Kavita Berwal

Addresses: H.S.B., Guru Jambheshwar University of Science and Technology, Haryana, India ' PIMR Parul University, Vadodara, Gujarat, India ' New Delhi Institute of Management, New Delhi, India

Abstract: A successful economy depends on banks' ability to allocate loans to borrowers effectively. The current study aims to analyse the determinants of bank credit allotted by commercial banks in India. The ADF and PP tests are used to check the stationarity of the data, and the autoregressive distributed lag approach (ARDL) is used for empirical analysis of the data from 1997 to 2021. The study found that liquidity and bank size affect bank credit in the long run, but credit risk, exchange rate (ER), gross domestic product (GDP), and real lending rate (RLR) have no significant effect on bank credit in the long run. However, in the short run, credit risk and RLR have an important and positive impact on bank credit supply, whereas bank size has a negative and significant influence on bank credit.

Keywords: bank credit; interest rate; deposits; non-performing assets; NPA; banking system; economic growth; India.

DOI: 10.1504/IJICBM.2025.149925

International Journal of Indian Culture and Business Management, 2025 Vol.36 No.3, pp.285 - 300

Received: 17 Aug 2023
Accepted: 25 Aug 2023
Published online: 18 Nov 2025 *

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