Does the Performance of Banking Sector Promote Economic Growth? A Time Series Analysis

Purpose: In terms of stimulating the economy, banks play an essential role. These directly or indirectly influence economic growth (GDP) a country. This study analyses association between banks' performance and GDP growth. Theoretical Framework: The banking sector acts as effective mechanism that funds various projects all over majority such studies focus on developed nations. Although there is great deal literature this issue concerning markets, lack related to emerging developing economies (Sensarma & Bhattacharyya, 2016). has been undertaken analyse India's which economy Design/Methodology: data includes independent variables indicate performance. proxies used for bank's are: bank nonperforming loans total gross (%) (NPL), domestic credit provided by financial (% GDP) (DC), Return Equity (ROE), capital assets ratio (CAP), regulatory risk-weighted (CAR). At same time, substitute in product (GDP). All organised operating India form sample study. period from 1990 2029. To test hypotheses, simple regression, multicollinearity tests, ordinary least square (POLS) are performed. Findings: findings few credit, return equity, adequacy ratio, linked operational efficiency, correlated with study's empirical results recommend country's (India's) policymakers should assist laying down new developmental policies will strengthen sector, turn economy. Research, Practical Social Implications: shows Indian have major impact It also identifies primary attributes GDP. Such help researchers understand significant contributors Originality Value: There many studied determinants But first tried establish impact/relationship