 Banking System Stability and Economic Growth in India: An Empirical Investigation (2000–2024)Lalita Malusare
African Journal of Commercial Studies, 2025, vol. 6, issue 4 Abstract: This study examines the relationship between banking system stability and economic growth in India from 2000 to 2024. Key indicators including non‑performing assets (NPAs), capital adequacy ratio (CAR), credit‑to‑GDP ratio, and banking sector Z‑scores were analyzed using econometric techniques such as the ARDL bounds testing approach and Granger causality analysis. Findings indicate that higher NPAs negatively affect GDP growth, while improved capital adequacy and stronger banking sector stability positively influence economic performance. The research also highlights the importance of financial regulation by the Reserve Bank of India, financial inclusion initiatives, and digital banking transformation in strengthening systemic resilience. Policy recommendations emphasize strengthening prudential regulation, improving asset quality management, and aligning financial innovation with macroeconomic stability. Keywords: Banking system stability; Economic growth; India; Non-performing assets (NPAs); Capital adequacy ratio (CAR); Credit-to-GDP ratio; Z-score; Financial inclusion; Monetary policy; Reserve Bank of India (RBI); Financial regulation; Digital banking; ARDL model; Financial intermediation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cwk:ajocsk:2025-85 Access Statistics for this article More articles in African Journal of Commercial Studies from African Journal of Commercial Studies |
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