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Mandatory Disclosure And Bank Earnings Management In India

Year: 2025

Type: article

Abstract: The study examines how mandatory disclosures impact banks' earnings management in India. The Reserve Bank of India (RBI) enforced disclosures fearing under declaration of non-performing assets (NPA) and attributable loan loss provision (LLP). In a way, such disclosure requirement was a “name and shame” strategy by the RBI. Our study hypothesizes disclosures to reduce information asymmetry and moral hazard - in a way reflected in the discretionary LLP. The results broadly support our hypothesis that regulatory enforcement through disclosures had the intended effect of hamstringing the banks' ability to manage earnings. Thus, mandatory disclosures positively affect discretionary LLP reduction, consequently minimizing the latitude that banks enjoy.

Source: Zenodo (CERN European Organization for Nuclear Research)

DOI: 10.5281/zenodo.17579825

Author: Dr. Rabindra Kumar

Institution: Magadh University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

OpenAlex ID: W7104998611

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