Foreign banks in India: liabilities or assets?

Saibal Ghosh

MPRA Paper from University Library of Munich, Germany

Abstract: Using data on Indian banks for 1996-2007, the article examines the impact of foreign banks on the domestic banking sector. The analysis suggests that foreign bank penetration improves profitability and asset quality, although it dampens spreads. The results are robust to alternate measures of foreign bank presence. In addition, foreign banks appear to impact the maturity of credit portfolio of domestic banks. Finally, the results also support the fact that foreign banks typically charge lower interest rates as compared to domestic banks.

Keywords: foreign banks; non-performing loans; credit allocation; interest rates; India (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-ban and nep-cwa
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Citations: View citations in EconPapers (6)

Published in Economic Papers 2.31(2012): pp. 225-243

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Related works:
Journal Article: Foreign Banks in India: Liabilities or Assets? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:39802

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