| Description |
1 online resource (45 pages) : illustrations |
| Series |
IMF working paper ; WP/11/50 |
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IMF working paper ; WP/11/50.
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| Contents |
Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Financial Sector Liberalization and Bank Ownership in India; A. Financial Liberalization in India; B. Ownership Structure in the Indian Banking Sector; C. Statutory Requirements on Cash and Liquidity and Allocation of Credit; III. Competition and Efficiency Indicators Post Liberalization; IV. Statutory Requirements and Allocation of Assets Post Liberalization; A. Data Sources; B. Cash Holdings and the Cash Reserve Requirements; C. Investment in Government Securities and the Statutory Liquidity Requirement |
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D. Credit to the Private Sector, SLR, and Fiscal DeficitE. More Robustness Tests; V. Explaining the Differential Behavior of the Public Banks; VI. Conclusion; A. Areas of Reform; B. Variables Definitions; C. Summary Statistics of the Variables; D. Banks and Ownership Details; Footnotes |
| Summary |
Do financial sector reforms necessarily result in expansion of credit to the private sector? How does bank ownership affect the availability of credit to the private sector? Empirical evidence is somewhat mixed on these issues. We use the Indian experience with liberalization of the financial sector to inform this debate. Using bank-level data from 1991-2007, we ask whether public and private banks deployed resources freed up by reduced state preemption to increase credit to the private sector. We find that even after liberalization, public banks allocated a larger share of their assets to government securities than did private banks. Crucially, we also find that public banks were more responsive in allocating relatively more resources to finance the fiscal deficit even during periods when state pre-emption (measured in terms of the requirement to hold government securities as a share of assets) formally declined. These findings suggest that in developing countries, where alternative channels of financing may be limited, government ownership of banks, combined with high fiscal deficits, may limit the gains from financial liberalization |
| Notes |
Title from PDF title page (IMF Web site, viewed March 31, 2011) |
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At head of title: Asia and Pacific Department |
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"March 2011." |
| Bibliography |
Includes bibliographical references |
| Notes |
English |
| Subject |
Banks and banking -- Ownership -- India
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Finance -- India
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Credit -- India
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Credit
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Finance
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India
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| Form |
Electronic book
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| Author |
Kochhar, Kalpana, author.
|
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Panth, Sanjaya, author.
|
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International Monetary Fund. Asia and Pacific Department, issuing body.
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| ISBN |
1283558920 |
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9781283558921 |
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9781462351541 |
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1462351549 |
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1455251208 |
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9781455251209 |
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9786613871374 |
|
6613871370 |
|
1455222046 |
|
9781455222049 |
|
