Journal
| Title | Factors Determining Credit Derivatives in ICICI Bank | |
| Author's Name | Shashi Srivastava and Divya Srivastava | |
| ISSN | 0974-7281 | |
| Page(s) | 36-41 | |
| Volume No. | 5 | |
| Issue Month | January 2013 | |
| Keywords | Credit Derivatives, Loan and Advances, Securitization. | |
| Abstract | The Indian Banking Industry has been plagued by high level of Non Performing Assets. This has been a matter of concern as rising Non Performing Assets tend to reduce the level of profitability of banks. Hence, it is highly imperative to find out the measures to cope up with the problem of rising Non Performing Assets. In this context, Credit Derivatives have gained a wide acceptance as a risk mitigating tool. Recent developments in the Indian markets have shown encouraging signs as far as Credit Derivatives are concerned where RBI has recently issued guidelines for the banks stating the periphery in which they could use these instruments. The present paper reviews the growth of the Credit Derivatives in ICICI Bank representing the Private Sector Banks, and examines the factors that have influenced their growth. Objectives of the present study were to analyze the trend of Credit Derivatives and to identify the determinants for the use of Credit Derivatives in ICICI Bank. The present study uses annual data for the financial year 2006 to 2011. Data was analyzed with the help of graphical presentation and regression analysis. It was found that, in the case of ICICI Bank, increase in lending resulting in higher credit risk increases the possibility of credit default and in turn provides a platform for the use of Credit Derivatives as a risk mitigating tool. |
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