ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Income DiversificationSubscribe to Income Diversification

Non-interest Income and Stability of Commercial Banks

The impact of the share of non-interest income on the risk of banks in India for the period 1993–2018 is examined, employing coefficients of variation, and linear and quantile regression techniques. The higher share of non-interest income leads to diversification benefits and reduces the risk of banks. The share of non-interest income has fallen and more banks have become unstable in the last decade. For the nationalised and foreign banks, the increase in the proportion of non-interest income has led to greater stability. However, for some of the private banks, this relation is not linear.

Income Diversification and Risk-adjusted Returns for Indian Banks

Of late, banks are under pressure to improve their performance and asset quality. Diversifying income might improve their performance at a time when interest incomes are under strain. This article covers trends in diversification from 2000 to 2017 and explores the relationship between income diversification and risk-adjusted returns for banks in India. Our research supports the hypothesis that banks diversifying into non-interest income category are able to get higher risk-adjusted returns. For public sector banks, it is found that it is the dividend and treasury income that is contributing positively and significantly to risk-adjusted return.

WTO Agriculture Agreement, Common Property Resources and Income Diversification Strategy

In the wake of the dismantling of the quantitative restriction (QR) regimes and the ongoing round of negotiations on the WTO Agreement on Agriculture (AoA), India and other like-minded developing countries have been raising fundamental concerns on the likely adverse impact of the AoA on their food and livelihood security systems. Simultaneously, the government of India has also initiated measures for carefully monitoring and regulating the import liberalisation process ushered in by the Exim policy 2001-02. Based on these developments, this paper advocates rigorous negotiation positions and proactive programmes of development in order to address the pressing problems arising from the AoA. Developing countries, whose agrarian economies are characterised by 'ecosystemic multifunctionality', have the scope for providing income diversification opportunities for the weaker sections of the farming communities through development of common property resources. This then could form the best safety net to contain the fallout of the agri-agreement.
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