Table 7 Impact of large deposits on net...

Table 7

Impact of large deposits on net interest margin and Z-Score of across banking groups in India, 2013–2022

	NIM			Z-Score			NIM		Z-Score
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
Variables	NPVTSB	OPVTSB	PSB	NPVTSB	OPVTSB	PSB	<=2017	>2017	<=2017	> = 2018
T20DEP	0.002	−0.013	0.033***	−0.051*	−0.031*	−0.069**	0.032***	0.008	−0.023	−0.048*
T20DEP	(0.010)	(0.010)	(0.009)	(0.029)	(0.018)	(0.028)	(0.010)	(0.012)	(0.019)	(0.027)
CDR	0.000	0.037***	0.013**	−0.007	−0.035	0.040*	−0.002	0.017**	0.009	−0.002
CDR	(0.002)	(0.011)	(0.005)	(0.011)	(0.024)	(0.023)	(0.001)	(0.009)	(0.019)	(0.015)
CASAR	0.039***	0.052***	0.029***	−0.030	−0.095***	−0.017	0.040***	0.042***	−0.013	−0.035
CASAR	(0.010)	(0.008)	(0.009)	(0.031)	(0.022)	(0.022)	(0.010)	(0.011)	(0.015)	(0.024)
NNPAR	−0.120***	−0.132***	−0.057***	−0.263***	−0.276***	−0.152***	−0.121***	−0.078***	−0.240***	−0.136*
NNPAR	(0.018)	(0.036)	(0.010)	(0.081)	(0.070)	(0.042)	(0.026)	(0.017)	(0.052)	(0.071)
SLSS	−3.886***	−3.985**	1.202	−2.223	7.721	6.713	1.512	−2.521**	7.758*	0.205
SLSS	(1.417)	(1.930)	(1.103)	(4.305)	(6.024)	(5.619)	(1.845)	(1.258)	(4.038)	(4.334)
SPRIO	7.846***	2.605***	1.629*	0.054	4.709*	−2.413	6.003**	5.736***	4.821	−1.348
SPRIO	(1.741)	(0.840)	(0.866)	(3.039)	(2.678)	(4.201)	(2.357)	(0.961)	(3.104)	(1.335)
SUSL	2.412	1.303	−1.172	0.859	5.503	−8.254***	−3.451	2.903***	3.148	1.914
SUSL	(2.302)	(1.468)	(1.193)	(2.592)	(3.524)	(2.911)	(3.252)	(0.786)	(3.806)	(1.406)
NLTA	−0.009	−0.297**	−0.122*	−0.466	−0.395	−1.159***	0.018	−0.125**	−0.857***	−0.985***
NLTA	(0.140)	(0.124)	(0.064)	(0.355)	(0.395)	(0.182)	(0.116)	(0.057)	(0.139)	(0.138)
GDPR	0.003	−0.013**	−0.008***	−0.020	0.033	0.027	−0.099*	−0.008*	0.027	0.005
GDPR	(0.014)	(0.005)	(0.003)	(0.034)	(0.024)	(0.033)	(0.052)	(0.004)	(0.095)	(0.015)
REP	0.063	−0.009	0.021	0.562**	0.026	−0.001	−0.136	0.058	−0.206	0.114
REP	(0.104)	(0.055)	(0.033)	(0.236)	(0.190)	(0.130)	(0.093)	(0.042)	(0.240)	(0.162)
CTA	1.411	0.566	2.145***	1.436	6.601***	3.098	4.056**	2.320*	4.394**	0.031
CTA	(1.729)	(0.700)	(0.510)	(6.343)	(2.145)	(2.958)	(1.788)	(1.268)	(1.777)	(3.622)
Constant	0.448	2.169*	1.218	4.638	8.197***	12.184***	1.571	−0.019	9.610***	12.559***
Constant	(2.145)	(1.281)	(1.092)	(2.963)	(3.170)	(3.962)	(0.997)	(0.992)	(2.825)	(2.391)
Observations	97	118	211	92	118	209	236	190	230	189
Number of bank id	11	12	26	11	12	26	49	42	47	42
Entity effects	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES
Prob > F	0.00***	0.00***	0.00***	0.00***	0.00***	0.00***	0.00***	0.00***	0.00***	0.00***
Overall R²	0.813	0.686	0.689	0.508	0.456	0.476	0.566	0.834	0.608	0.514

	NIM			Z-Score			NIM		Z-Score
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
Variables	NPVTSB	OPVTSB	PSB	NPVTSB	OPVTSB	PSB	<=2017	>2017	<=2017	> = 2018
T20DEP	0.002	−0.013	0.033***	−0.051*	−0.031*	−0.069**	0.032***	0.008	−0.023	−0.048*
T20DEP	(0.010)	(0.010)	(0.009)	(0.029)	(0.018)	(0.028)	(0.010)	(0.012)	(0.019)	(0.027)
CDR	0.000	0.037***	0.013**	−0.007	−0.035	0.040*	−0.002	0.017**	0.009	−0.002
CDR	(0.002)	(0.011)	(0.005)	(0.011)	(0.024)	(0.023)	(0.001)	(0.009)	(0.019)	(0.015)
CASAR	0.039***	0.052***	0.029***	−0.030	−0.095***	−0.017	0.040***	0.042***	−0.013	−0.035
CASAR	(0.010)	(0.008)	(0.009)	(0.031)	(0.022)	(0.022)	(0.010)	(0.011)	(0.015)	(0.024)
NNPAR	−0.120***	−0.132***	−0.057***	−0.263***	−0.276***	−0.152***	−0.121***	−0.078***	−0.240***	−0.136*
NNPAR	(0.018)	(0.036)	(0.010)	(0.081)	(0.070)	(0.042)	(0.026)	(0.017)	(0.052)	(0.071)
SLSS	−3.886***	−3.985**	1.202	−2.223	7.721	6.713	1.512	−2.521**	7.758*	0.205
SLSS	(1.417)	(1.930)	(1.103)	(4.305)	(6.024)	(5.619)	(1.845)	(1.258)	(4.038)	(4.334)
SPRIO	7.846***	2.605***	1.629*	0.054	4.709*	−2.413	6.003**	5.736***	4.821	−1.348
SPRIO	(1.741)	(0.840)	(0.866)	(3.039)	(2.678)	(4.201)	(2.357)	(0.961)	(3.104)	(1.335)
SUSL	2.412	1.303	−1.172	0.859	5.503	−8.254***	−3.451	2.903***	3.148	1.914
SUSL	(2.302)	(1.468)	(1.193)	(2.592)	(3.524)	(2.911)	(3.252)	(0.786)	(3.806)	(1.406)
NLTA	−0.009	−0.297**	−0.122*	−0.466	−0.395	−1.159***	0.018	−0.125**	−0.857***	−0.985***
NLTA	(0.140)	(0.124)	(0.064)	(0.355)	(0.395)	(0.182)	(0.116)	(0.057)	(0.139)	(0.138)
GDPR	0.003	−0.013**	−0.008***	−0.020	0.033	0.027	−0.099*	−0.008*	0.027	0.005
GDPR	(0.014)	(0.005)	(0.003)	(0.034)	(0.024)	(0.033)	(0.052)	(0.004)	(0.095)	(0.015)
REP	0.063	−0.009	0.021	0.562**	0.026	−0.001	−0.136	0.058	−0.206	0.114
REP	(0.104)	(0.055)	(0.033)	(0.236)	(0.190)	(0.130)	(0.093)	(0.042)	(0.240)	(0.162)
CTA	1.411	0.566	2.145***	1.436	6.601***	3.098	4.056**	2.320*	4.394**	0.031
CTA	(1.729)	(0.700)	(0.510)	(6.343)	(2.145)	(2.958)	(1.788)	(1.268)	(1.777)	(3.622)
Constant	0.448	2.169*	1.218	4.638	8.197***	12.184***	1.571	−0.019	9.610***	12.559***
Constant	(2.145)	(1.281)	(1.092)	(2.963)	(3.170)	(3.962)	(0.997)	(0.992)	(2.825)	(2.391)
Observations	97	118	211	92	118	209	236	190	230	189
Number of bank id	11	12	26	11	12	26	49	42	47	42
Entity effects	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES
Prob > F	0.00***	0.00***	0.00***	0.00***	0.00***	0.00***	0.00***	0.00***	0.00***	0.00***
Overall R²	0.813	0.686	0.689	0.508	0.456	0.476	0.566	0.834	0.608	0.514

Note(s): Robust standard errors are in parentheses

***p < 0.01, **p < 0.05, *p < 0.1

Figures in brackets are standard errors. ***, ** and * indicates statistical significance at 1%, 5% and 10%, respectively

Deposit concentration (T20D) is the key variable of interest. The table reports the effect of T20DEP on the NIM and Z-Score. Columns (1), (2), (3), (4), (5) and (6) report results between bank ownership groups: new private sector banks (NPVTSB), old private sector banks (OPVTSB) and public sector banks (PSB). New public sector banks were incorporated post liberalization and de-regularization of Indian economy in 1990. Old private sector banks existed since the beginning of the 20^th century, and the public sector banks are the resultant of nationalization of the private sector banks in 1969 and 1980 where the government holds minimum 51% stake. Column (7), (8), (9) and (10) report the results during two time periods (2013–2017) and (2018–2022)

Source(s): Authors’ estimates; see Appendix for variable description

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