A Study on Aggregate Investment Portfolio of Scheduled Commercial Banks in India

The Scheduled Commercial Banks (SCBs) are like a backbone of financial markets in India. The banking environment in the country has witnessed transformation in the post banking sector reforms era. The prudential regulatory model has encouraged greater play for market forces by providing required autonomy to the banks on one side and imposed the restrictions about capital adequacy, NPA norms on the other side. Such environment requires banks to look for various ways to get some non-interest income apart from the core income stream by way of interest. In order to augment their income streams banks also do constant churning of their investment portfolio and actively participate into market operations of securities. The present research work highlights this aspect through investment data analysis. The investment data is referred from the bulletins published by RBI. The correlation of investments to the macroeconomic environment is analyzed for the period 2000–2010. The time series analysis is also presented for the investment portfolio over the same period.