Factors Affecting Credit Risk of Indian Banks: Application of Dynamic Panel Data Model

Authors

  • Santi G. Maji
  • Preeti Hazarika

DOI:

https://doi.org/10.33516/rb.v42i1.85-96p

Keywords:

Credit Risk, Profitability, Bank Size, Bank Capital, Liquidity Risk, Dynamic Panel Data Model, Indian Banks.

Abstract

This paper has tried to address the factors affecting the credit risk of Indian banks considering the dynamic nature of credit risk. The results of the distribution of credit risk over the years show significant changes. To address this dynamic nature of credit risk, we have employed the dynamic panel data regression model. The results indicate that there is lag impact of credit risk which positively influences the current risk. The results also indicate that profitability, bank capital and growth in GDP are negatively associated with credit risk for all the banks. On the other hand, loan loss provision has a positive influence on the credit risk. However, significant differences in results are found between public sector and private sector banks.

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Published

2016-04-01

How to Cite

Maji, S. G., & Hazarika, P. (2016). Factors Affecting Credit Risk of Indian Banks: Application of Dynamic Panel Data Model. Research Bulletin, 42(1), 85–96. https://doi.org/10.33516/rb.v42i1.85-96p

Issue

Volume 42, Issue 1, April 2016

Section

Articles
Crossref
Scopus
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Europe PMC

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