Testing the impact of Competition on Risk of Indian Commercial Banks: A comparative study

Authors

  • Santi. G. Maji
  • Preeti Hazarika

DOI:

https://doi.org/10.33516/rb.v43i3.74-90p

Keywords:

Bank Risk, Banking Competition, Financial Stability, Public Sector Banks, Private Sector Banks.

Abstract

The present paper is a comparative investigation of the impact of bank competition on risk of public sector and private sector banks in India after controlling relevant bank specific and macroeconomic variables. Secondary data on listed public sector and private sectors banks in India are collected from 'Capitaline Plus' corporate database for a period of 16 years from 2000 to 2015. Employing alternative measures of bank risk and competition, the study finds that the influence of competition on risk is negative for public sector banks, which supports the competition stability view. However, in case of private sector banks quite opposite results are found, supporting competition fragility view. This result is expected as both the bank groups have different levels of competition. While the degree of competition is more for public sector banks, the market structure is relatively more concentrated within private sector banks.

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Published

2017-10-01

How to Cite

Maji, S. G., & Hazarika, P. (2017). Testing the impact of Competition on Risk of Indian Commercial Banks: A comparative study. Research Bulletin, 43(3), 74–90. https://doi.org/10.33516/rb.v43i3.74-90p

Issue

Volume 43, Issue 3, October 2017

Section

Articles
Crossref
Scopus
Google Scholar
Europe PMC

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