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Study of the Effect of Deregulation of Interest Rate on Profitability of Banking Sector in India


Affiliations
1 Gandhi Institute for Technology, Gangapada, Bhubaneswar, India
2 Institute of Management, Bhubaneswar, India
     

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Bank is the financial institution whose main objective is to take deposits form the public in different forms called its liability for which it pays interest and lends the same to individuals, corporate and other financial institutions called, these are called assets for which bank charges interest. The difference between the lending rate and deposit rate is called profit of the bank. In India, Reserve Bank of India is the supreme authority to control all banking activities. It is mandatory for all banks to follow RBI guidelines, new amendments to provide fare transparent banking services. The Banking regulation Act 1949 has laid down to formulate policies for the benefit of all banks as well as for the implementation to the public. The act is meant for the fare transparent banking service and for the interest for both the public as well as banking companies.

In last few years there is an eradicate change in the performance of the banking companies. This growth depends on various factors. The bankers are providing customer specific plans which is being easier for the customers to repay the loans.


Keywords

Benchmark Prime Lending Rate, BR Act 1949, Banking Sector Reform, RBI Guidelines, Non Performing Assets(NPA), Rturn on Assets(ROA), Deregulation of Interest Rate, Profitability.
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  • Study of the Effect of Deregulation of Interest Rate on Profitability of Banking Sector in India

Abstract Views: 113  |  PDF Views: 0

Authors

Himansu Bhusan Gochhayat
Gandhi Institute for Technology, Gangapada, Bhubaneswar, India
Sumanta Kumar Nayak
Institute of Management, Bhubaneswar, India

Abstract


Bank is the financial institution whose main objective is to take deposits form the public in different forms called its liability for which it pays interest and lends the same to individuals, corporate and other financial institutions called, these are called assets for which bank charges interest. The difference between the lending rate and deposit rate is called profit of the bank. In India, Reserve Bank of India is the supreme authority to control all banking activities. It is mandatory for all banks to follow RBI guidelines, new amendments to provide fare transparent banking services. The Banking regulation Act 1949 has laid down to formulate policies for the benefit of all banks as well as for the implementation to the public. The act is meant for the fare transparent banking service and for the interest for both the public as well as banking companies.

In last few years there is an eradicate change in the performance of the banking companies. This growth depends on various factors. The bankers are providing customer specific plans which is being easier for the customers to repay the loans.


Keywords


Benchmark Prime Lending Rate, BR Act 1949, Banking Sector Reform, RBI Guidelines, Non Performing Assets(NPA), Rturn on Assets(ROA), Deregulation of Interest Rate, Profitability.

References