Post-Crash Development in the Indian Banking Sector

The Indian banking sector has undergone a profound transformation in the wake of successive economic disruptions - the global financial crisis of 2007-09, the local banking crisis of 2013-17, the currency notes ban crisis of 2016-17, and the COVID-19 pandemic. Each episode has exposed latent vulnerabilities in the financial system: inefficiencies in intermediation, the build-up of credit risk, and structural imbalances in competition.

This book offers the comprehensive empirical assessment of how the Indian banking industry has evolved in the post-crash era, using bank-level data from 2001 to 2022. Bringing together advanced econometric and frontier methodologies, including a two-stage network DEA metafrontier framework, the Panzar–Rosse approach with dynamic panel estimation, and system GMM techniques, the authors’ examine three core dimensions of banking performance. The book analyses how successive crises have shaped operational efficiency, competitive conduct, and asset quality across bank ownership categories; evaluate the effectiveness of regulatory reforms including Basel III implementation, the Prompt Corrective Action framework, mergers and recapitalisation of public-sector banks, the Insolvency and Bankruptcy Code, and the integration of FinTech innovations; and the drivers of credit risk.

Post-Crash Development in the Indian Banking Sector will be a valuable reference for those studying comparative banking in emerging-market economies and looking to reform their banking sector.

Rachita Gulati is an Associate Professor at the Indian Institute of Technology (IIT) Roorkee, India, and Research Economist at the Asian Development Bank Institute (ADBI), Tokyo, since May 2024. She previously held the prestigious Subir Chowdhury Visiting Fellowship (2017–2018) at the India Observatory, London School of Economics and Political Science. Her research focuses on banking and financial institutions, financial stability and regulation, corporate governance, and applied econometrics. She has co-authored books on bank deregulation and efficiency, and on banking regulation and supervision in South Asia, and published articles in Omega, Economic Modelling, WIREs Climate Change, Socio-Economic Planning Sciences, and Research in International Business and Finance.

Sunil Kumar is a Professor in the Faculty of Economics at South Asian University (SAU), New Delhi, India. With over 29 years of teaching and research experience, his work centres on data envelopment analysis, stochastic frontier analysis, banking efficiency, and industrial productivity, with a particular focus on the performance of financial institutions and public-sector enterprises. He has published in peer-reviewed journals and has authored books on efficiency and productivity in the manufacturing and banking sector in India, contributed to international reports by Asian Productivity Organization, and a study with the Reserve Bank of India on “Governance, Efficiency and Soundness of Indian Banks”.