Dynamics of Income Diversification, Profitability and Risk: Analysis of Public and Private Sector Banks in India
1st International Conference on Technologies for Smart Green Connected Society 2021, ICTSGS 2021
; 107:4503-4516, 2022.
Article
in English
| Scopus | ID: covidwho-1874782
ABSTRACT
“Do not put all eggs in one basket”. This risk management principle applies to every other industry whether it be manufacturing or banking. Interest income is believed to be a bank's primary source of income. Banks diversify their operations to generate non-interest income and lower their total risk exposure. Applying panel-data regression, the study analyzes and compares the intensity of diversification of income sources between public and private sector banks in India, using secondary data for Indian financial years 2012-13 to 2020-21. It utilizes RAROA and z-score to examine the impact of income diversification on profitability and risk, respectively. It discovered that private banks are more diversified than public banks. With low levels of diversification, public banks had a positive impact on profitability and risk. This is evident from research that banks leverage income diversification as a tool to fight covid-19 backed slowdown. © The Electrochemical Society
Full text:
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Collection:
Databases of international organizations
Database:
Scopus
Type of study:
Prognostic study
Language:
English
Journal:
1st International Conference on Technologies for Smart Green Connected Society 2021, ICTSGS 2021
Year:
2022
Document Type:
Article
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