Title: Efficiency and its determinants of systemically important shadow banks of India

Authors: Nandita Bhattacharjee; Ambika Prasad Pati

Addresses: Department of Commerce, North Eastern Hill University, Umshing Mawkynroh, Shillong, Meghalaya, 793022, India ' Department of Commerce, North Eastern Hill University, Umshing Mawkynroh, Shillong, Meghalaya, 793022, India

Abstract: The growth of shadow banks (SBs) across the globe is ubiquitous, and they are playing a major role in the financial system of all the developed and emerging economies. During the last decade, India as an emerging economy has seen a phenomenal growth of their activities which has prompted the Reserve Bank of India to bring these financial companies under a robust regulatory structure. This necessitates an understanding of their functioning with respect to their efficiency. With ten years dataset of SBs, the efficiency score is ascertained. Data envelopment analysis approach has been employed to ascertain their efficiency. The Malmquist productivity index is applied to see the changes in efficiency over the period and followed by Tobit regression to determine the influence of efficiency on bank variables. The findings reveal that improvement in internal practices, cost control and monitoring the asset quality is imperative.

Keywords: shadow banks; efficiency; determinants; India.

DOI: 10.1504/GBER.2023.132664

Global Business and Economics Review, 2023 Vol.29 No.2, pp.155 - 180

Received: 19 May 2021
Accepted: 04 Apr 2022
Published online: 07 Aug 2023 *

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