Title: A Study on The Impact of Universalisation on The Indian Banking Industry
Abstract: The existence of financial markets and the banking industry act as the veins for the efficient flow of finance in the economy.Universalization is a concept in which a vast number of banking services are provided to customers under one umbrella.This thesis empirically tests the impact of universalization on the Indian banking industry.The performance of two major banks (public and private sector), has been analyzed as a proxy of the performance of the Indian banking industry.To measure the extent of universalization, the UB (universal banking) score has been calculated by using the entropy method with the help of the percentage share of operating segments (in revenue terms).This UB score along with other performance parameters has been regressed against a vector of performance indicators in the banking industry.The results of the multiple regression conducted indicate that universalization has significantly impacted the performance of private banks (ICICI) but it has no significant impact on the performance of public sector banks (SBI).The suggested reasons are government policies & control, increasing NPAs, etc.