ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Dhananjay BapatSubscribe to Dhananjay Bapat

Income Diversification and Risk-adjusted Returns for Indian Banks

Of late, banks are under pressure to improve their performance and asset quality. Diversifying income might improve their performance at a time when interest incomes are under strain. This article covers trends in diversification from 2000 to 2017 and explores the relationship between income diversification and risk-adjusted returns for banks in India. Our research supports the hypothesis that banks diversifying into non-interest income category are able to get higher risk-adjusted returns. For public sector banks, it is found that it is the dividend and treasury income that is contributing positively and significantly to risk-adjusted return.
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