PERFORMANCE EVALUATION OF MERGED REGIONAL RURAL BANKS IN INDIA : A LONGITUDINAL STUDY
Abstract
The present study aims to evaluate the performance of merged regional rural banks (RRBs) in the post-merger era. The performance of Regional rural banks' is examined by two variables: Return on Equity(ROE) and Return on Assets (ROA). The results exhibited that although there has been a decline in ROA and ROE of merged RRBs during the study period. However, they performed better than the national average of all RRBs operating in the country in the corresponding years. In the second part of the analysis, the study dwells on the variables that influence the performance of merged RRBs for observed performance. The results revealed that bank-specific variables such as non-interest income or other income ratio, capital adequacy ratio, and operating expenses ratio have a significant impact on the profitability of rural banks. In contrast, the Inflation rate (INFLA) and Gross Domestic Product (GDP) have been insignificant in explaining the variation in merged RRBs' performance.
Keyword : Determinants, India, Performance Evaluation, Profitability, Regional Rural Banks.
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