Title: The impact of board characteristics and related party transactions on the financial performance of Indian banks

Authors: Najib H.S. Farhan; Faozi A. Almaqtari

Addresses: Faculty of Business Studies, Arab Open University, P.O. Box 84901 Riyadh, 11681 Prince Faisal Ibn Abdulrahman, Hittin, Saudi Arabia ' Department of Accounting and Finance, College of Business Administration, A'Sharqiyah University (ASU), P.O Box 42, Postal Code: 400 Ibra, Sultanate of Oman

Abstract: The main aim of this study is to evaluate the impact of board characteristics and related party transactions on the financial performance of Indian listed banks. The study sample comprises 38 banks. The study found that board size and independence significantly influence the return on capital employed, while non-executive board of directors and remuneration positively affect Indian banks' financial performance. The results also reveal that all subsidiary transactions negatively and significantly affect the return on capital employed and earnings per share and positively impact the return on capital employed and profit after tax. This research has theoretical and practical implications for financial managers, investors, and policymakers in Indian banks. Theoretically, it bridges an existing gap in the literature on the banking sector in India. Practically, this research investigates how all key personnel and subsidiaries as proxies for RPTs associate with board attributes to influence banks' financial performance in India.

Keywords: board characteristics; related party transactions; RPTs; financial performance; Indian listed banks.

DOI: 10.1504/IJMFA.2026.150671

International Journal of Managerial and Financial Accounting, 2026 Vol.18 No.1, pp.41 - 74

Accepted: 27 Nov 2023
Published online: 19 Dec 2025 *

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