Determinants of Positive Systemic Impact of Banks in India

This study examines the determinants of positive systemic impact for banks in India. The independent variables considered for the study include the sector, bank size, return on assets, beta, leverage, capital adequacy, non-performing assets, price to book value, deposits, loans & advances, investments, net interest income, and non-interest income. A linear discriminant analysis model was applied in the study.

The results of the study indicate that leverage, deposits, loans & advances, investments, return on assets, and non-performing assets are the major discriminators between banks with positive systemic impact and those with non-positive systemic impact. The results of the study also suggest differences in the determinants of positive systemic impact between public sector banks and private sector banks.

Keywords: determinants of positive systemic impact, linear discriminant analysis,public and private sector banks, India.