Examining The Effect Of Bancassurance On Financial Performance Of Commercial Banks In India

Abstract

ABSTRACT newlineIntroduction: This study provides a comprehensive empirical examination of the effect of bancassurance on the financial performance of commercial banks in India, with a comparative analysis of performance of public sector and private sector banks in India. Bancassurance is a strategic channel integration between banks and insurance companies in which banks through their wide network of branches, cross sell insurance products. As Indian banks face shrinking interest margins and increasing competition, bancassurance has emerged as a critical revenue diversification strategy for them. newlineResearch Problem: Earlier studies by Sreesha and Joseph (2011), Grover and Bhalla (2013), Arora and Jain (2013), and Samal (2019) reported significant improvements in profitability, non-interest income and operational efficiency of banks through bancassurance partnerships. On the other hand, research by Mehta et al. (2016), Leepsa and Singh (2017), Kumar and Verma (2018), Nair and Pillai (2020) reveal minimal or negligible financial benefits to banks from bancassurance. The contradictory findings necessitate the need for further study on the topic to examine the testimony. newlineResearch Gaps: A review of literature is conducted and the major gaps are identified as below: newlineand#61623; Limited Empirical Evidence on Long-Term Financial Impact newlineand#61623; Lack of Comparative Analysis Between Public and Private Sector Banks newlineand#61623; Insufficient Focus on Financial Performance Using the CAMELS Framework newlineand#61623; Inadequate Examination of Risk Metrics newlineThis study seeks to fill these gaps by conducting a twelve-year empirical analysis of Indian commercial banks, with a special focus on comparing public and private sector banks. By embedding the analysis within the CAMELS framework and incorporating risk exposure dimensions, it intends to offer a comprehensive, data-driven evaluation of how bancassurance shapes the financial health and strategic posture of Indian banks. newlineObjectives of the Study: Objectives of this study are derived from the observed research problems and rese