Determinants of credit risk: Empirical evidence from Indian commercial banks

Credit risk is a significant factor affecting the financial stability of banks. Keeping credit under control essential to maintain bank’s cash flow. This paper examines various profitability, microeconomic and macroeconomic indicators that affect risk. The study uses dataset 31 banks from 2012 2021 employs panel data modelling approach account for any variations in risk-taking behavior. results revealed statistically negative relationship between return on equity when nonperforming loans proxy finding was consistent across fixed effect, random pooled OLS methods, at 1 percent significance (P value < 0.00), indicating extent decreases as profitability increases. It further found bank age ownership type positively risk, while factors such size operational efficiency negatively Further, variables showed gross domestic product associated with inflation affects Overall, findings this demonstrated affected by both micro factors. also addresses policy implications it helps stakeholders examine determinants make decisions, ultimately lower their