Banking Sector Performance and Economic Growth in India: An Empirical Study

Abstract

The financial area's job in impacting monetary development is a basic area of study, especially in creating economies like India. This study plans to research the drawn-out connection between banks' presentation and monetary development in India, using board information from 20 public area banks crossing from 2009 to 2019. Not at all like past investigations, this exploration integrates inventive factors like revenue edge, return on resources, bank venture, and loaning ability to evaluate their relationship with the nation's GDP (Gross domestic product). Utilizing different econometric methods including the Pedroni and Kao trial of co-mix, board vector mistake remedy model (VECM) dynamic, board completely adjusted standard least squares (FMOLS), and dynamic OLS (DOLS), the review digs into the nuanced elements between these bank-related factors and monetary development. The discoveries uncover that the chose bank-related factors are to be sure co-incorporated with monetary development, showing a supported relationship over the long haul. In particular, the review features a huge connection between's advantage edge and return on resources with financial development. Nonetheless, it recommends that loaning limit and venture exercises inside the financial area don't display a huge relationship with monetary development, highlighting the requirement for strategy mediations to upgrade these perspectives to invigorate higher development rates.