Why Me? The Saga of Public Sector Banks under Prompt Corrective Action

9 Pages Posted: 19 Jul 2019

See all articles by Navneet Kaur

Navneet Kaur

Institute of Management Technology (IMT), Nagpur

Parneet Kaur

Punjabi University - School of Management Studies

Date Written: July 18, 2019

Abstract

This study explores Income and funding strategies of banks under Prompt Corrective action (PCA) and it also compares the Technical, Pure technical and scale efficiency of these banks with Public sector banks not under PCA and Private sector banks. This study found that PCA banks earn higher non-interest income and have higher borrowings than Non-PCA Public sector banks and are as efficient or inefficient as Non PCA-public sector banks. However, PCA banks are bigger in size and have lower Technical but higher Pure Technical and scale efficiencies than Private sector banks. This study highlights the concern of Dr. Viral V Acharya, regarding the unfinished agenda of restoring Public Sector banks’ health in India (R.K. Talwar Memorial Lecture) and not just the banks under PCA.

Keywords: Income diversification, Funding strategy, efficiency, Prompt corrective action

JEL Classification: E02, G33, P47

Suggested Citation

Kaur, Navneet and Kaur, Parneet, Why Me? The Saga of Public Sector Banks under Prompt Corrective Action (July 18, 2019). Available at SSRN: https://ssrn.com/abstract=3421917 or http://dx.doi.org/10.2139/ssrn.3421917

Navneet Kaur (Contact Author)

Institute of Management Technology (IMT), Nagpur ( email )

603 Khullar Apartments
Byramji Town
Nagpur, MA Maharashtra 440013
India

Parneet Kaur

Punjabi University - School of Management Studies ( email )

India

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