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ISSN 2063-5346
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NON-INTEREST INCOME AND FINANCIAL PERFORMANCE: AN ECONOMETRIC STUDY OF SELECTED INDIAN PUBLIC SECTOR BANKS

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GANESH PRASAD PANDA DR. ELINA KANUNGO
» doi: 10.48047/ecb/2023.12.si4.1795

Abstract

The traditional revenue streams of Indian banks have been significantly changed as a result of the high pace of innovation and development of financial products. The primary objective of this paper is to determine upto what extent, non-interest income from digital banking sources affects the profitability of public sector banks in India. Besides, the impact of diversification in income streams and the growing proportion of Non-Interest income on profitability of Indian PSBs have also been studied. This study is based on the performance of India's top five public sector banks between 2011–12 to 2020–21. The ROA has been selected as the dependent variable. Bank size, NIM, RNPA, loans, and capital adequacy are taken as control variables, while the independent variable is non-interest income, which is evaluated as the ratio of Non interest income to total assets. The results showcased that Non-Interest Income shows a significant and positive relation with the Profitability of Indian Public Sector Bank.

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