A study on impact of Basel II norms on the performance of banks in India

Abstract

The present research aims to study the impact of Basel II norms on the asset and investment composition; and performance of Banks in India with reference to financial parameters like profitability, productivity and asset quality in Pre and Post Basel II phase respectively. Further, the study also examines the impact of Capital Adequacy Ratio as per Basel II norms on the performance of Banks in India. Lastly, the study proposes CAIPPA Model to analyze the impact of Basel II Norms. The present research is based on all the Banks operational in India for the entire period of ten years from the year 2005 to 2014 which is further segmented into each phase of five years namely Pre-Basel II period (2005 to 2009) and Post Basel II period (2010 to 2014) respectively. For this study, Financial Ratio Analysis (FRA) method and statistical techniques like Arithmetic Mean, Coefficient of Variance, Student s paired T-test for two sample means, ANOVA F-test, Multiple Correlation and Multiple Regression have been utilized to interpret the data and derive meaningful findings. The study highlights that overall compliance to Basel II norms has positive impact on all the dimensions, across all the categories of Banks in India. newline newline