Determinants of Buffer Capital for Banks in India
Publication details: Jharkhand XLRI 2023Description: Vol 48 No 4 Pg 548 -559Subject(s): In: Management And Labour StudiesSummary: The study examined the impact of bank-specific indicators on the buffer capital of banks in India. The impact of key variables return on assets, credit deposit ratio, return on equity and the ratio on non performing loans to total loans on buffer capital has been examined for banks in India. Using dynamic panel data regression, the results reveal that non- performing loans to total loans, return on assets and return on equity have a positive impact on buffer capital. it is revealed that the banks keep extra capital cushion with an increase in risk elements. Also the credit deposit ratio is having a negative but significant impact on buffer capital. The results further reveal persistency in buffer capital across all models. The role of the cost of capital in the determination of buffer capital has also been examined.| Item type | Current library | Status | Barcode | |
|---|---|---|---|---|
| Article | St. Francis Institute of Management and Research | Available | AR1075 |
The study examined the impact of bank-specific indicators on the buffer capital of banks in India. The impact of key variables return on assets, credit deposit ratio, return on equity and the ratio on non performing loans to total loans on buffer capital has been examined for banks in India. Using dynamic panel data regression, the results reveal that non- performing loans to total loans, return on assets and return on equity have a positive impact on buffer capital. it is revealed that the banks keep extra capital cushion with an increase in risk elements. Also the credit deposit ratio is having a negative but significant impact on buffer capital. The results further reveal persistency in buffer capital across all models. The role of the cost of capital in the determination of buffer capital has also been examined.
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