Evaluating Credit Risk Efficiency in Indian State-Owned Banks: Pre-Merger vs. Post-Merger Perspectives
Year: 2025
Type: article
Abstract: Indian banks are increasingly engaging in mergers, combining resources under a unified charter to enhance efficiency, expand operations, and strengthen credit risk management. This study assesses the impact of mergers on the credit risk performance of Indian state-owned banks, focusing on Canara Bank, Punjab National Bank (PNB), and Bank of Baroda (BOB). Using secondary data, key credit risk indicators such as operational efficiency, management efficiency, capital adequacy ratio, return on assets, liquidity, CASA ratio, and non-performing assets (NPA) ratio are analysed. The paired t-test methodology evaluates pre- and post-merger performance. Findings reveal a decline in NPAs across all banks in the post-merger period, a significant factor driving mergers. Notably, Canara Bank and PNB demonstrated improved performance across all parameters, while BOB experienced a decline in competency post-merger.
Authors: Tanu Sharma, Pramod Kumar
Institution: Dayalbagh Educational Institute
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4406627515