Indian Journal of Finance and Banking

Journal Information
ISSN / EISSN : 2574-6081 / 2574-609X
Total articles ≅ 117

Latest articles in this journal

Mohd Atif Afzal, Nasreen Khan, Abdul Saboor Mohammad, Mohd Taqi
Indian Journal of Finance and Banking, Volume 10, pp 18-30;

India’s precautionary step toward COVID-19 led to 1.3 billion people enduring lockdown, consequently halting the wheels of the Indian economy. Though the crash of the stock market was evident and explanatory, it left all stakeholders (including the investors and government) with no choice. Deteriorating SENSEX and other indices forced investors to withdraw and lose attraction from the market and looped in more serious issues to the Indian stock market. This paper empirically analyses the short-term impact of COVID-19 on five selected BSE indices for SENSEX, FMCG, Bank, Corporate-Bond, and Industrial using econometric models. Stationarity was checked by Augmented Dickey-Fuller and Philips-Perron test. Autocorrelation was assessed and mitigated by Durbin-Watson, Breusch-Godfrey Serial Correlation LM test, and Cochrane-Orcutt transformation method. This study attempts to apply Multiple Regression, the GARCH model, Standard Vector Autoregression (S-VAR), and Impulse Response Function (IRF) to decode the relation. The results indicated that the COVID-19 pandemic is adversely affecting the performance of the Indian stock market in the short run. All the indices showed a negative relationship antecedent with the effect of COVID-19, except for the SPICBI index. This paper implies investment solutions for the investors and policymakers to cope with the unprecedented situation amidst COVID-19.JEL Classification Codes: H54, R53.
Dibin Kodanghat Karuvalappil, Archana Balakrishnan
Indian Journal of Finance and Banking, Volume 10, pp 12-17;

The recent war between Ukraine and Russia is yet another instance that emphasizes that economic overdependence may destroy the economic fabric of a nation. Taking this premise into consideration, this study aims to examine the long-term and short-term connection between the European Union and the United States GDP growth rates using tools like linear regression, Granger causality test, and impulse response function. Quarterly GDP figures of the European Union and the United States were taken for the period spanning 22 years, starting from quarter 2 of the financial year 1998-1999 to quarter 4 of the financial year 2018-2019. The Regression model and the Granger Causality test prove that the United States’ GDP growth rate is influenced by that of the European Union in the short-run as well as in the long-run, but the EU’s GDP is independent and does not follow the former. The possible explanation can be the trade surplus of the European Union over the United States in the recent past. Hence, the authors are of the opinion that a much more balanced trade between these two powerful economies would ensure the stabilization of the global trade and stability of the global power equation.JEL Classification Codes: F40, F43, F44.
Yong-Chul Shin, Surjit Tinaikar, Yu Zhang
Indian Journal of Finance and Banking, Volume 10, pp 1-11;

We focus on the role that labor unions can play in influencing firms’ efficiency in corporate investment decisions where investment efficiency is defined as the extent to which deviations from optimal investment levels are minimized. We argue that unions may not simply be adversaries of managements as is often believed but have incentives to monitor managements in ways similar to that of other corporate governance players. These incentives stem from the fact that unions, like other corporate stakeholders, are adversely affected by investment inefficiencies that may result from firm-level overinvestment and underinvestment decisions. Consistent with this explanation, we find that labor unionization is indeed positively associated with improvements in investment efficiency and that these effects are generally stronger in bargaining environments that are favorable to unions. For instance, union effects in improving investment efficiencies are stronger in states where the Democratic Party is more influential and in states which have not enacted legislations that restrict union activities. These results indicate that union monitoring of investment efficiency is more likely to occur through channels that are a part of unions’ collective bargaining processes. Our results are robust to different measures of investment efficiency, different empirical specifications, and endogeneity of union membership.JEL Classification Codes: J51, J59, O16, G31.
Firas S. Q. Barakat, Jawad Hussein, Oroubah A. R. Mahmoud, Mohammed Bayyoud
Indian Journal of Finance and Banking, Volume 9, pp 213-229;

The objective of this study was to investigate the factors affecting the financial performance of insurance companies in Palestine. The entire study population was targeted at 7 insurance companies listed on the Palestine Exchange for the period between 2010 and 2019. The researchers used multiple linear regression analysis to create two models that represent the financial performance; the study adopted two models for measuring financial performance, the first model measuring financial performance by return on assets, and the other measuring financial performance by return on equity. The results showed a positive and statistically significant impact on the solvency margin, the state's legal system, the size of the board of directors, and the size of the company on the return on assets. There is a negative, statistically significant impact on each of the claims loss ratios, the dependence on the four major auditing firms, and the ownership of board members on the return on assets. The reliability of reinsurance and the audit committee did not show a statistically significant effect on the return on assets. The results showed a positive, statistically significant impact of the solvency margin and company size on the return on equity. The results indicate a negative, statistically significant impact of both the claims loss ratio and the Audit Committee on the return on equity. Reinsurance dependent, dependence on the four major auditing companies, the state's legal system, the size of the board of directors, and the ownership of board members have no significant effect on the return on equity. The study recommends that insurance companies in Palestine should comply with the required margin of money, which was set by the Palestinian Capital Market Authority at 150%.JEL Classification Codes: G32, G22, G34, H54.
Aasim Abdullah, Ullas Rao
Indian Journal of Finance and Banking, Volume 9, pp 230-239;

The purpose of this research is to analyze and evaluate the performance of ESG funds and Islamic funds vis-à-vis conventional mutual funds, whereby ESG funds and Islamic funds take into account environmental, social, governance and Shariah-based factors into account during portfolio structuring. To conduct this study, the approach primarily employed the publicly available data of thirty funds from each aforementioned category, calculated their logarithmic returns based on closing prices and subsequently ranked the funds according to the returns. Ten of the top-ranking funds were then selected (owing to some limitations of market data availability) for the methodology to calculate performance using descriptive statistics, one-sample t-tests, portfolio performance measures (Sharpe ratio, Treynor ratio, Jensen’s Alpha) and the well renowned Fama-French three-factor model. The results show that much of the excess returns across a majority of the funds (in all categories) are largely explained by the market premium, while the fund manager skill, SMB and HML factors do not lend much weight in explaining the excess returns attributable to the funds. Furthermore, a considerable finding of this study is that ESG and Islamic funds are not underperforming, but exhibit resilience, and has the potential to evolve and become mainstream options for investments.JEL Classification Codes: B26, G11, G15, G23, M14.
Karthik Reddy, Ravichandra Reddy B
Indian Journal of Finance and Banking, Volume 9, pp 192-202;

ALM technique is a strategic financial tool particularly focused on management of financial risks such as liquidity and interest rate risks only. In general, mismatch between assets and liabilities poses high risk (financial or non-financial risk) to the company’s capital. Therefore, company’s can protect their capital from various risks through proper management of assets and liabilities. Present study applied CAMEL technique to measure the efficiency of ALM practices of selected NBFCs-D in Tamilnadu for the period of 2011-2020. The study revealed that, SRTFL reported strongest level of financial soundness in the aspects of capital adequacy, management efficiency and earning efficiency whereas satisfactory level in liquidity and moderate/fair level in assets quality. Similarly, SRCUFL reported strong level in capital adequacy and earning efficiency, satisfactory level in assets quality and liquidity and fair level in management efficiency. Similarly, SFL has shown strongest level of performance in asset quality and earning efficiency, satisfactory in management efficiency, fair level in capital adequacy and marginal/poor level in liquidity. Similarly, SKFL reported satisfactory level in assets quality, fair level in capital adequacy and earning efficiency, marginal level in management efficiency and unsatisfactory/worst level in liquidity. Finally, NLOF has reported unsatisfactory/worst level of performance in all parameters except capital adequacy. This indicates high risk level/default level of the NLOFL during the study period. JEL Classification Codes: A10, B21, G23.
Larabi Moustapha, Roucham Benziane
Indian Journal of Finance and Banking, Volume 9, pp 203-212;

This paper aims to reveal the relationship between capital structure variables and the Profitability of Islamic banks. The examination has been performed using panel data for a sample of 05 Islamic banks operating in the Gulf Cooperation Council GCC countries (2010-2020). Capital Structure is measured by Deposit to Total Assets (DTA) and Equity to Total Assets (ETA) ratio. In contrast, return measures Profitability on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). Data collected were analyzed by using E-Views10 software. The research results indicate that the ETA ratio has a positive and significant relationship with ROA. Whereas, The Deposit to Total Assets (DTA ratio) has no significant relationship with Return on asset (ROA). There is an insignificant relationship between (ETA ratio, DTA ratio) and the ROE ratio. Moreover, there is a significant solid effect between the ETA ratio and Net Profit Margin (NPM). At the same time, there is no significant relationship between the DTA ratio and Net Profit Margin (NPM). Therefore, the study can guide The GCC Islamic bank executives, The Shariah Supervisory Board, and the decision-makers in the GCC area to rely on specific capital structures for Islamic banks to improve their profitability.JEL Classification Codes: G32, L25, G21, C23, C33.
Kannadas Sendilvelu, Srikanth Parthasarathy
Indian Journal of Finance and Banking, Volume 9, pp 184-191;

The study focuses on comparing the investment behaviour of banking and non-banking professionals in India and also, how the Covid pandemic has impacted their behaviour towards investments as such. The aim of the project is to understand if there are any differences in the investment choices of both sets of people. For the purpose of the study, data has been collected from banking and non-banking employees through the issue of google forms, and the same data has been used to analyse the behaviours among the targeted groups. A sample of 122 data points is considered for the study, with banking and non-banking professional samples. The questions try to bring out the actual behaviour of the respondents with regards to their investments, before and after the Covid pandemic. With that, comparison of banking and non-banking, in particular, will be well understood by the reader of the study. Apart from that, statistical models like Chi-square test, Regression analysis and Correlation analysis have been done for the collected set of data points. By the end of the study, the gain is all about the idea and understanding about the investment behaviour of the banking and non-banking employees that the Covid pandemic has made any impact on the investment behaviour of people. JEL Classification Codes: G4, G11, G40, G41.
Thirupathi Gadaboina
Indian Journal of Finance and Banking, Volume 9, pp 177-183;

Flourishing Authority practices like values, virtues, dispositions, attributes, and competencies improve employee outcomes. Few Authority practices in the form of strategies were selected to achieve better performance. The Authority styles were associated with public, financial, and managerial proportions of employees together in public and private sectors would assist the correlation among Authority styles and proportions disturbing the Authority styles which would be supportive to identify the main important policy variables for recovering the Authority styles. The presentation was based on the primary source of data of the public sector, the LIC, and the private sector; Reliance Insurance was chosen voluntarily for the research because of the researcher's awareness of different regions of Telangana. The data was gathered using the five points Likert scale. The study concluded that authority styles in both sectors managers distinguish the employees under supervision without any wisdom of accountability.JEL Classification Codes: H81, I13, J24, I18.
Kunwar Sanjay Tomar
Indian Journal of Finance and Banking, Volume 9, pp 164-176;

The Industrial sectors have their unique place in the economic interlinkage. The sectoral valuation reflected by each sector indices shows how each sector responds to different events. The exogenous event Covid-19 impact has been differential due to the impact of lockdown and other Covid-19 appropriate restrictive measures. The present paper examines the change in the volatility spillover induced by Covid-19. The study uses daily sectoral indices data from India's oldest exchange, the Bombay Stock Exchange. Data from January 2010 to November 2020 has been split into four subgroups to find how COVID-19 has affected the volatility spillover using the Diebold and Yilmaz Index. Ranks have been assigned to find the change in the four periods' volatility to the volatility spillover's magnitude and direction. The impact of the COVID-19 is strong enough to change the volatility spillover, which followed a system. Capital Goods volatility increased three times. At the same time, the Auto sector becomes a volatility receiver instead of the net volatility dispenser, from 2.5% before COVID-19 to -3.39% after COVID-19 lockdown. Bankex remains unaffected by Covid-19.JEL Classification Codes: G01, G11, D81, D85.
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