Mandira Sarma

Foreign banks in developing countries are often found to indulge in "cream skimming," a lending strategy that targets only wealthy segments of the credit market and excludes small and marginal borrowers from the general pool of borrowers. This paper attempts to investigate whether lending patterns of foreign banks in urban regions of Indian states are indicative of such practices. Using credit data on urban regions of 21 states of India for 1999-2011, this paper finds empirical evidence of cream skimming by foreign banks in India.

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Rural Short-term Cooperative Credit Structure

Vol. 43, Issue No. 09, 01 Mar, 2008

Mandira Sarma, Rajiv Kumar

This article critiques the package initiated by the government of India that aims at reviving the rural short-term cooperative credit structure in the country.

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India's Capital Adequacy Regime

Vol. 42, Issue No. 43, 27 Oct, 2007

Mandira Sarma, Yuko Nikaido

This note presents an analytical review of the Basel I capital adequacy regime and the current level of the capital to riskweighted asset ratio (CRAR) of India's banking sector. Under Basel I, the banking system is performing reasonably well, with an average CRAR of about 12 per cent, that is higher than the internationally accepted 8 per cent. A discussion from the Indian perspective of several issues relating to the Basel II norms that are to be introduced in March 2008.