Has Bank Concentration Increased for Indian Nationalised Banks?

Research evidence has pointed out that bank consolidation led by mergers and amalgamations is responsible for concentrated banking structure in India, where public sector commercial banks dominate the Indian banking system in terms of its market share. In this context, present study attempts to measure the bank concentration using the Herfindahl-Hirschman Index (HHI) in terms of total assets for all the nationalised banks in India for a ten year time period from 2008 to 2017. The research work also aims to study the growth of bank concentration as well as to assess whether or not the bank concentration has increased during the said time period. The results revealed that Bank of Baroda has recorded the highest average market share in terms of total assets amongst all the nationalised banks in India followed by Punjab National Bank, whereas Bhartiya Mahila Bank registered the lowest average market share in terms of total assets. The trend analysis revealed that although the overall statistically significant average HHI value (0.065) has been recorded to be low for the given time period, however concentration in terms of total assets has witnessed an increase amongst all the nationalised banks of India as revealed from the positive growth percentage of HHI (6.35%) during the said time period.