Sinha, Pankaj and Taneja, Varundeep Singh and Gothi, Vineet (2009): Evaluation of riskiness of Indian Banks and probability of book value insolvency.
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Recently, a lot of questions were raised about the financial health of commercial banks in India. This paper analyzes the Indian banks' riskiness and the probability of book-value insolvency under the framework developed by Hannan and Hanweck (1988). A risk index, known as Z score, for Global Trust Bank that became insolvent in 2004 suggests that the framework developed by Hannan and Hanweck (1988) is also relevant in the Indian context. For a random sample of 15 Indian Banks (public & private sector), we determine the riskiness/probability of book value insolvency over the years and also carry out a relative comparison between public and private sector banks in India. Results obtained in the study show that the probability of book value insolvency of Indian Banks has reduced over years and the probability of book value insolvency is lower in case of public sector banks in comparison to private sector banks.
|Item Type:||MPRA Paper|
|Original Title:||Evaluation of riskiness of Indian Banks and probability of book value insolvency|
|English Title:||Evaluation of riskiness of Indian Banks and probability of book value insolvency|
|Keywords:||Riskiness, insolvency, Z-statistic|
|Subjects:||E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance
|Depositing User:||Pankaj Sinha|
|Date Deposited:||17. May 2009 00:24|
|Last Modified:||12. Feb 2013 10:34|
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