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Impact of Credit Risk on Indian Banking Sector
Santhosh Saravanan, Student: Dr. S. Sangeetha, Assistant Professor, Firebird Institute of Research in Management, Chettipalayam, Coimbatore – 641201.
Pages: 1-10 | First Published: 05 Feb 2024
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Abstract

By offering credit and financial services to people, companies, and industries, the Indian banking industry significantly contributes to fostering economic growth and development. However, credit risk, which results from the potential for borrowers to stop making loan payments, significantly jeopardizes the stability and success of Indian banks. The research makes use of quantitative techniques and statistical analysis to accomplish this goal. The study uses bank size, capital adequacy ratio, return on equity, and leverage ratio as independent factors, along with data on credit risk as the dependent variable. These variables are frequently viewed as key determinants of an economy's overall health and performance. Credit risk has a significant influence on the Indian banking industry, to sum up. In addition to impeding economic growth and endangering the integrity of the financial system, it has an impact on banks' financial health. To maintain the durability and sustainability of the banking industry and consequently support India's economic objectives, addressing credit risk necessitates a comprehensive approach comprising prudent risk management, efficient regulatory monitoring, and rigorous credit assessment methods. 

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