The Impact of Macroeconomic Variables on the Efficiency of India's Scheduled Banking Sector
Author(s): Dr. Y. Azith
Publication #: 2509016
Date of Publication: 08.08.2025
Country: India
Pages: 1-8
Published In: Volume 11 Issue 4 August-2025
Abstract
This article examines the influence of macroeconomic conditions on the performance of Indian scheduled commercial banks from 2006 to 2015. Specifically, it analyzes the effects of Foreign Direct Investment (FDI), Gross Domestic Product (GDP), Exports, Foreign Exchange Reserves (FER), Stock Market Turnover (STO), Inflation Rate (INFR), and Real Interest Rate (RIR) on key performance indicators: deposits, advances, and net profit. Applying the Ordinary Least Squares (OLS) method, the analysis reveals that FDI, GDP, Exports, Stock Market Turnover, and the Real Interest Rate are statistically significant factors influencing bank performance. The findings underscore the critical link between the broader economic environment and the banking sector's financial health.
Keywords: Macroeconomic indicators, Ordinary least square, commercial banks and CAGR.
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