Banks’ Performance and Economic Growth in India: A Panel Cointegration Analysis

The banking sector plays a crucial role in the economic growth of nation. purpose this study is to examine long-term association between banks’ performance and developing economy: India. used panel data 20 public banks for period 2009 2019. It applied Pedroni Kao test co-integration, vector error correction model (VECM) dynamic, fully-modified ordinary least squires OLS (FMOLS), dynamic (DOLS) estimate relationship interest margin return on assets, bank investment, lending capacity with gross domestic product (GDP) country. identification incorporation these bank-related variables are innovations study. results indicate that co-integrated growth. Further analysis indicates significant assets In addition, investment activities not significantly associated growth, leading policy recommendation improve upon two factors order achieve higher rates.