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Influence of Selective Internal Factors on the Performance of Public and Private Sector Commercial Banks in India: A Dynamic Panel Application

Sreemanta Sarkar & Debdas Rakshit

Indian Economic Journal2026https://doi.org/10.1177/00194662261437384article
ABDC B
Weight
0.50

Abstract

This work attempts to make a comparative evaluation of the impact of main bank-specific factors on the performance of Indian public and private sector commercial banks (PSBs and PVBs) over the period from 2000 to 2017. On the basis of an extensive literature survey, we have selected deposit (DEP), asset management (AMT), capital strength (CST), quality of loan (QOA) and productivity of employees (POE) as the explanatory variables for this study. Taking return on assets (ROA) and return on equity (ROE) as measures of banking performance, we have tried to examine the impact of these internal variables on the performance of Indian public and private sector commercial banks through the application of the system generalised method of moments (GMM) approach developed by Arellano and Bover (1995) . The estimation results indicate that these bank-specific variables have a differential impact on different bank groups. While AMT and CST have a highly significant positive impact, and QOA has a profoundly significant negative impact on ROA for both PSBs and PVBs, POE exerts a significant negative impact on ROA of PSBs but an insignificant positive impact on ROA of PVBs. Results further suggest that whereas AMT has an extremely significant positive impact and DEP and QOA have a vastly significant negative impact on ROE for both PSBs and PVBs, CST affects ROE in a significantly positive manner in the case of PVBs, but it has no significant impact on PSBs. The results obtained in this study have profound implications to frame appropriate policy decisions for the development of public and private sector commercial banks of India. JEL Codes: G21, G28, C23

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https://doi.org/https://doi.org/10.1177/00194662261437384

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@article{sreemanta2026,
  title        = {{Influence of Selective Internal Factors on the Performance of Public and Private Sector Commercial Banks in India: A Dynamic Panel Application}},
  author       = {Sreemanta Sarkar & Debdas Rakshit},
  journal      = {Indian Economic Journal},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1177/00194662261437384},
}

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0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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