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

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Determinants of Off-Balance Sheet Activities

The paper seeks to identify the factors influencing off-balance sheet (OBS) activities of public sector banks in India. Using pooled data analysis for the period 1995-96 to 1999-2000, the analysis reveals that (i) size plays an important role in influencing OBS activities, and (ii) higher the levels of capital and liquid assets, lower the incentive of the banks to engage in OBS activities. This is in consonance with hedging theory, which contends that the aversion to risk might be an important determinant for banks not actively engaging in OBS activities.

Leadership in Banking

Public sector banks may have succeeded in shedding the excess flab of their workforce, but the malaise lies deeper in the upper echelons of administration. More often than not, chairmen are ill-equipped to meet radical demands of a techno-rich age, and move jobs too quickly to bring about long-lasting change.

Setting the Stage for Bank Privatisation

Whether the move towards eventual privatisation, including transfer of control to foreign banks, is the right prescription for a banking system that has shown an improving trend in efficiency while remaining stable needs to be vigorously debated.

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