Distress of Indian Banking Sector: Evidence from Indian Economy

Abstract

The ever-growing influence of the corporate houses in the politics has made them the centerpiece of decision making in the Indian banking system. From 2004 till today the activities of the banking sector has benefitted more the industrialists rather than the common people by easing the flow of public money to corporate houses either directly or indirectly. The earlier practice of aggressive lending to corporate houses by Public sector banks and recent practice of writing off bad corporate loans in large numbers has ultimately benefitted the corporate sector. The rising Non-priority sector NPA of Public sector banks has not only exposed the rampant practicing crony capitalism in Indian economy but also showcased the fragile health of Indian banking sector. The self scrutiny of the banking sector is needed to cleanse the whole banking system for the welfare of banks and society at large is utmost necessity.