DR. S. B. SHINDE and TEJAS T. SHINDE
Abstract:
The financial stability of the Indian banking sector is crucial for the country's economic growth, with District Central Cooperative Banks serving as the backbone of the financial system. This study examines the impact of key macroeconomic factors on the performance and stability of District Central Cooperative Banks in India. Using a comprehensive analysis of data from 2010 to 2023, the research evaluates the influence of GDP growth, inflation, interest rates, exchange rates, and fiscal policies on the financial performance of District Central Cooperative Banks. The study employs both qualitative and quantitative methods, including regression analysis, to identify trends and correlations between macroeconomic indicators and bank profitability, asset quality, and capital adequacy. Findings reveal that GDP growth positively correlates with the profitability of District Central Cooperative Banks, while inflation and fluctuating interest rates pose significant challenges to asset quality. Exchange rate volatility impacts foreign-exposure assets, and fiscal policies shape liquidity and lending behavior. These insights underline the importance of robust macroeconomic management and sound banking policies to ensure financial stability. This research contributes to existing literature by providing updated insights into the dynamic relationship between macroeconomic variables and banking performance in the Indian context. Policymakers and banking professionals can leverage these findings to mitigate risks and strengthen the resilience of the banking sector.
