International Research journal of Management Science and Technology

  ISSN 2250 - 1959 (online) ISSN 2348 - 9367 (Print) New DOI : 10.32804/IRJMST

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INTERACTION OF RISKS AND ITS IMPACT ON PERFORMANCE: EVIDENCE FROM COMPARATIVE ANALYSIS OF SELECTED PUBLIC AND PRIVATE SECTOR BANKS IN INDIA

    3 Author(s):  DR. A. R. SAINATH, PROF. GNANENDRA M, PROF. CHAITHRA N

Vol -  11, Issue- 6 ,         Page(s) : 168 - 174  (2020 ) DOI : https://doi.org/10.32804/IRJMST

Abstract

Banks are considered to be the pillar of the economy and they deal with day to day activities which sometimes can be risky. The performance and the risk involved vary from bank to bank and sector to sector. By identifying the level of risk and performance, particular sectors can imply certain measures to increase the sector’s performance and to decrease the risk. This paper examines to measure the bank risks and its influence on performance of Indian banks. Credit risk, liquidity risk, market risk and operational risks are proxies for the bank risks and Return on Assets (ROA) and Net Non-Performing Assets (NPA) to Net Advances are considered to be proxies for performance. The study is conducted for a period of 10 years from 2009-10 to 2018-19 which includes 10 public and 10 private sector listed Indian banks. The results conclude that based on the mean values; there is a better performance in banks of private sector compared to the banks of public sector. Whereas public banks have lower risks compared to private banks except liquidity risk which is higher in Public sector. The study also observed that both the sectors show different relationship between market risk, liquidity risk, operational risk and credit risk.

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