Spread Analysis Of Indian Banks For The Period 2006-11

Abstract

The strong banking sector has always been one of the positives of Indian economy. During past few years banking industry in India has remained buoyed. The profitability of banks depends to a large extent on their spread margin i.e. on the difference between cost of returns and cost of funds. The cost of funds is a function of cost of deposits and cost of borrowing whereas return on funds is a function of return on advances and return on investment. The article attempts to analyze the various elements of spread margin of banks under five difference categories, viz, nationalized banks, SBI group, new private banks, old private banks and foreign banks operating India in last five years time from 2006-11.