The Impact of New Private Sector Banks on Old Private Sector Banks in India

Abstract

The process of economic liberalization and implementation of the reforms measures have encouraged the entry of many new private players in Indian banking sector. This paper examines the effect of the entry of new private banks on the business and efficiency of old private banks. To achieve this objective, T-test has been applied to find out the difference in the performance of old private banks before and after the entry of new private sector banks. Here financial ratios have been taken as the parameters for ascertaining the changes in the business of old private banks in India. The results indicates that the presence of the new private sector banks does pose threat to old private sector banks at the moment, however, the same cannot be said in the future.