DETERMINANTS OF PROFITABILITY OF PUBLIC SECTOR AND PRIVATE SECTOR COMMERCIAL BANKS IN INDIA : 2017-18: A DISCRIMINANT ANALYSIS APPROACH

The study of determinants of profitability of commercial banks is an important one for better understanding the economic growth of a country. In the recent past, it is observed that only some of the public and private sector banks are earning profits and majority of them are incurring losses in India We have used Discriminant Analysis approach for identifying the determinants which discriminate between profit earning banks and loss incurring banks for year 2017-18. The results clearly indicate that the predictor variable viz., operating efficiency is the primary one which discriminates between two categories noted. The results have relevance to regulators, bank managements, policy makers, financial analysts and academicians.