A Study on Random Behaviour and Econometric Modelling for Prediction of Financial Performance of Selected Public Sector Banks in India

Abstract

Introduction newlineBanks play an important role in economic resource mobilization of an economy. It caters to the newlineneeds of all sectors of the economy. Apart from the intermediary role it also plays a significant newlinerole for balanced economic growth of a country. newlineThe significance of the present study lies on the fact that public sector Banks have been playing newlinevital role in the Indian economy since 1991. Though a large number of studies had been newlineconducted earlier by different researchers to analyze the determinants and financial performance newlineof various banks, it is quite true that very few studies were carried out to compare the newlineperformance of public sector Banks. So, the present research work is not only an important study newlinebut also is the need of an hour. newlineScope and period of Study newlineThe scope of study is limited to analyze and compare the financial performance of 10 leading newlinePublic Sector Banks (PSBs) selected on the basis of their total assets and on consolidation basis newlinein India which are in operation for the study period of ten years as on 31st March newline2011.Accordingly the Following banks have been selected. newline(i)Bank of Baroda,(ii).Bank of India,(iii)Canara Bank,(iv)Central Bank of India (v)IDBI, newline(vi)Oriental Bank of Commerce,(Vii)Punjab National Bank,(viii)Syndicate Bank,(ix)Union Bank newlineof India and (x)UCO Bank newlineObjectives of the study newlineObjective of the study is related to the achievement of the goal of the study by creating and newlinedesigning a necessary pathway. It determines the future outcome of the research. Following are newlinethe objectives considered for the purpose of research: newline1. To study the growth and development of selected PSBs in India; newline2. To analyze financial soundness of the selected Banks. newlineii newline3. To find out the differences between the ratios related to different Parameters of the CAMEL newlinemodel. newline1. To examine the relationship between the Parameters of the CAMEL model and Performance newlinewith an Econometric Approach. newline4. CAMEL Model Parameters and the Overall Performance through an Econometric newlineApproach newline5. To provide suggestions to