Bank Deposits in India: Analysis of Regional and Inter-Temporal Variations
Published: 2013
Author(s) Name: Shalini Sharma |
Author(s) Affiliation: Professor, Galgotia University, Greater Noida, U.P., India.
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Abstract
The paper focuses on evaluation of flows of deposits into
banks, which is the base of investment (credit capital),
resulting in accentuation of regional inequalities in Indian
banking industry. Growth of bank deposits is a function of
growth of income/GDP/SDP. Banks’ deposits are treated
as an indicator of economic development in general and
development of banking industry in particular. The paper
determines the changing levels and consequent trend of
growth of deposits in 32 states and Union territories of
India. The distributed lag regression modeling with partial
adjustment specification is used to evaluate the impact of
lagged deposits and SDP on banks’ deposits. The study
covers the period of 11 years from 1995 to 2005. Empirical
results show SDP as the main determinant, though current
deposits are influenced by previous year’s deposits. Multicollinearity
makes SDP non significant determinant of
deposits for some states, while lagged deposits emerge as
non-significant determinants of current deposits in some
other states. On the whole, distributed lag model furnishes
satisfactory results.
Keywords: N.A.
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