The paper examines the response of banks to privatization. Using data on all state-owned banks for the period 1990-2006, the findings indicate that fully state-owned banks are significantly less profitable than partially privatized ones. The improvements in performance by partially privatized...

According to economic theory, there are at least three indicators of excess capacity in banking: (a) low loan-to-asset ratio, (b) low profitability and (c) high per unit operating expense. If excess capacity exists, it will be easiest to identify, through these indicators, at regional rural...

The paper examines the process of banking sector reforms in India. It notes the beneficial impact to the financial system consequent upon the reforms and highlights the current weaknesses in the banking system. Against this background, the paper identifies the emerging challenges and discusses...