Elections and provisioning behavior: Assessing the Indian evidence

Saibal Ghosh

Economic Systems, 2022, vol. 46, issue 1

Abstract: The study investigates the impact of elections on bank provisioning. Using longitudinal data for India, the results indicate that banks reduce provisions around elections. This effect is seen primarily at state-owned and old private banks. In addition, the evolution of these provisions shows a cyclical pattern. No discernable impact of elections on provisioning is evident one year ahead of elections. The net effect of these practices is reflected in bank financials, in terms of higher funding cost and an increase in lending rates.

Keywords: Banking; Elections; India; Lending; Provisioning (search for similar items in EconPapers)
JEL-codes: D72 G21 P52 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:46:y:2022:i:1:s093936252200005x

DOI: 10.1016/j.ecosys.2022.100943

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