Impact of Non-Performing Assets on Operational Performance of Foreign Banks in India and Macro-Economic Determinants

Abstract

Banks are prime intermediaries in mobilizing resources and channelling resources to various sectors of the economy, free and adequate flow of bank credit has a positive impact on the growth of the sector and directly contributes towards increased national income, national production and employment. The main objective of the study is to examine the Impact of non-performing assets on operational performance of foreign banks and macro-economic variables. The study period covers ten years from 2007-08 to 2016-17. For the purpose of the study, ten banks have been selected based on the banks which have the highest share in Non-performing Assets. The banks are Citi Bank, Standard Chartered Bank, HSBC In India, Deutsche Bank, Development Bank of Singapore, Barclays Bank, AB Bank, SBM Bank (MAURITIUS) Ltd, CTBC Bank, Abu Dhabi Commercial Bank. The data analysis is done using ratio analysis, descriptive statistics like mean, standard deviation, coefficient of variation, compound annual growth rate, multiple regression and Ordinary least squire. The study concludes that the banks should take essential steps to curtail the mounting NPAs. This will allow the overall development of the economy and carry hope among the investors across the world in the Indian economy.

Keywords: Foreign Banks, Descriptive Statistics, Operational Performance, Non-performing Assets and Macro Economic Variables

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