Impact of board gender diversity on priority sector lending and insolvency risk: evidence from the Indian banking industry

Monika Bhatia, Pritpal Singh Bhullar, Dipayan Roy and Pradeep Kumar Gupta

International Journal of Electronic Finance, 2023, vol. 12, issue 4, 350-363

Abstract: This paper aims to examine the impact of board gender diversity on priority sector lending and insolvency risk of banks. The study takes 28 banks, 14 public and 14 private sectors, into consideration for the period from 2012 to 2020. The panel data regression is employed to measure the impact of board gender diversity on priority sector lending and insolvency risk. The findings of this study show that a higher percentage of female board members has a significant positive impact on the priority sector lending in banks. It means the women directors prefer to strengthen the weaker economic sectors for the economic growth of the country. Further, female directors are able to minimise the insolvency risk and insulate the banking institutions from being bankrupt. It indicates that with a women-led board of directors, banks can maintain their credit risk under the tolerance limit.

Keywords: gender diversity; insolvency risk; priority sector lending; banking industry; India. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijelfi:v:12:y:2023:i:4:p:350-363

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