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Performance of Odisha State Co-operative Bank: An ARDL Approach

Ranjan Kumar Nayak

Arthaniti: Journal of Economic Theory and Practice, 2022, vol. 21, issue 1, 7-26

Abstract: This article tries to analyse the financial performance of Odisha State Co-operative Bank (OSCB) for the period of 1949–1950 to 2014–2015. The methodology employed for the empirical analysis on this study involves autoregressive distributed lag (ARDL), augmented Dickey–Fuller (ADF) test and Phillips–Perron (PP). Statistical significant of the coefficient of the lagged error-correction term shows about 44 per cent correction in short-run dynamics to the long-run equilibrium. Using the ARDL approach, the study finds that owned fund, borrowing, advance and working capital, share capital and reserve are statistically significant in the short run; and deposits, share capital and reserve are statistically significant in the long run. The empirical results suggest that deposits and advances impact the profits of OSCB positively while cost of management, capital and reserves lead to lower profits. Hence, the study proposes the OSCB to follow a proactive management of capital with higher deposit generation and larger advances strategy to become a strong bank and grow steadily. JEL: C01, C1

Keywords: State co-operative banks; auto regressive distributed lag; Phillips–Perron; augmented Dickey–Fuller; CUSUM and CUSUMQ test (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1177/0976747920941769

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