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The paper highlighted on the impact of digital banking towards credit risk of the commercial banks in India. The digital banking parameters are represented by various financial ratios and the credit risk is represented by the net nonperforming asset to net advance ratio (NPA). Firstly paired t test has conducted to make a comparative view of understanding the influence of digital banking on financial indicators during pre and post Covid-19 era. To show the financial indicators those influenced the credit risk, proxied by NPA is represented by ordinary least square (OLS) regression analysis. But to get an unbiased result, Generalised methods of moments (GMM) analysis has been applied on the data set. Here credit deposit ratio (CRDEP), priority sector advances to total advances ratio (PRATT_ADV), ratio of term loans to total advances (TRMLN_ADV), ratio of secured advances to total advances (SECADT_ADV), ratio of interest income to total assets (II_TOTAST), cost of deposits (COD), cost of funds (COF), return on investments (ROINV), return on investments adjusted to cost of funds (ROINVADJTCOF) and capital adequacy ratio (CAR) are considered as independent variables and NPA as the dependent variable. The outcome of the analysis has shown that only TRMLN_ADV is negatively related with NPA. So, the research results show that the digital banking helps to mitigate credit risk by increasing loan disbursement. To control the credit risk especially NPA, the banking authority and government should take a firm initiative and set a proper regulation and monitoring so that people can be positively benefited by using digital technology.

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Spreading of Digital Banking in India and Its Impact on Credit Risk During the Era of Covid-19

  • 章节

  • 发表日期：

    2025年

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  • Sanjoy Laha,
  • Rabin Mazumder

摘要

The paper highlighted on the impact of digital banking towards credit risk of the commercial banks in India. The digital banking parameters are represented by various financial ratios and the credit risk is represented by the net nonperforming asset to net advance ratio (NPA). Firstly paired t test has conducted to make a comparative view of understanding the influence of digital banking on financial indicators during pre and post Covid-19 era. To show the financial indicators those influenced the credit risk, proxied by NPA is represented by ordinary least square (OLS) regression analysis. But to get an unbiased result, Generalised methods of moments (GMM) analysis has been applied on the data set. Here credit deposit ratio (CRDEP), priority sector advances to total advances ratio (PRATT_ADV), ratio of term loans to total advances (TRMLN_ADV), ratio of secured advances to total advances (SECADT_ADV), ratio of interest income to total assets (II_TOTAST), cost of deposits (COD), cost of funds (COF), return on investments (ROINV), return on investments adjusted to cost of funds (ROINVADJTCOF) and capital adequacy ratio (CAR) are considered as independent variables and NPA as the dependent variable. The outcome of the analysis has shown that only TRMLN_ADV is negatively related with NPA. So, the research results show that the digital banking helps to mitigate credit risk by increasing loan disbursement. To control the credit risk especially NPA, the banking authority and government should take a firm initiative and set a proper regulation and monitoring so that people can be positively benefited by using digital technology.