Impact of Interest Rates Changes on Banking Profitability Sector in India: An Empirical Research on the Profitability Performance of Selected Nationalized Banks in India
DOI:
https://doi.org/10.56209/jommerce.v2i1.7Keywords:
Banking Industry, Profitability, Nationalized, Interest Rate, Bank RateAbstract
The study designed the impact of an interest rate change on the profitability of the banking sector in India. In this work comparative analysis of various profitability performance ratios like ROA, ROE, ROCE, Net Profit Margin Ratio, EPS, etc… and also find out the impact of interest rate on banks profitability with the help of correlation and regression analysis of selected nine nationalized banks in India. The data is collected through various annual reports of selected respective banks from 2011-12 to 2019-20. For the analysis, the data researchers have used various statistical tools like Mean, Ratio, Correlation Analysis, and Regression Analysis. This study concluded that out of all selected ratios, ROA, ROCE, Net Profit Margin Ratio, Net Interest Income/Total assets, Net Interest Margin Ratio and Capital adequacy Ratio indicated that null hypothesis is rejected which means there is a significant difference between these ratios of selected nationalized banks during the study period and also found that Bank Rate has significantly impacted on Net Profit Margin Ratio in all selected nationalized banks in India.
References
Pooja, S. K. (2019, December). Growth aspects of PNB and SBI: A comparative study. International Journal of Research in Commerce, Economics & Management, 9(12), 1-6.
Sharma, G., & Sharma, D. (2017). Comparison and Analysis of Profitability of Top Three Indian Private Sector Banks. International Journal of Engineering Technology Science and Research, 4(6), 173-180.
Maina, M. W. (2015). Determinants of interest rate spread among commercial banks of Kenya (Doctoral dissertation).
Khan, W. A., & Sattar, A. (2014). Impact of interest rate changes on the profitability of four major commercial banks in Pakistan. International journal of accounting and financial reporting, 4(1), 142.
Das, P., Verburg, R., Verbraeck, A., & Bonebakker, L. (2017). Barriers to innovation within large financial services firms: An in-depth study into disruptive and radical innovation projects at a bank. European Journal of Innovation Management.
Tyler, K., & Stanley, E. (2007). The role of trust in financial services business relationships. Journal of Services Marketing.
Mishkin, F. S. (1981, January). The real interest rate: An empirical investigation. In Carnegie-Rochester Conference Series on Public Policy (Vol. 15, pp. 151-200). North-Holland.
Schmelzing, P. (2019). Eight centuries of global real interest rates, RG, and the ‘suprasecular’decline, 1311–2018. RG, and the ‘Suprasecular’Decline, 1311-2018.
Eichengreen, B., Watson, M. W., & Grossman, R. S. (1985). Bank rate policy under the interwar gold standard: a dynamic probit model. The Economic Journal, 95(379), 725-745.
Koch, T. W., & MacDonald, S. S. (2014). Bank management. Cengage Learning.
Nyaberi, N. N. (2018). Effect of Interest Rate Spread on Financial Performance of Commercial Banks in Kenya (Doctoral dissertation, University of Nairobi).
Kamunge, E. M. (2013). The Effect of Interest Rate Spread on the Level of Non Performing Loans of Commercial Banks in Kenya (Doctoral dissertation, University of Nairobi).
Downloads
Published
Issue
Section
License
Copyright (c) 2022 Journal of Social Commerce

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.