Recent trends in shareholding pattern of banks in India

The paper studies the recent trends in the shareholding pattern of banks in India. How it evolved over the time and how the trend in shareholding pattern of public sector banks and private sector banks differ over time. Whether they witness similar trends in their shareholding pattern or differ sharply.

To analyse the trend over a period of time, Chi square test of independence has been used to find whether the trend in shareholding of a particular category in private sector banks is similar to the trend in that particular category of public sector banks. For every category of shareholding in both the databases a separate null hypothesis and an alternate hypothesis has been stated, tested and inference drawn. With the research findings it is evident that Govt. is the dominant shareholder in the Indian banking industry. Domestic financial institutions have shown increased interest in investment in both the public and private sector banks, whereas foreign financial institutions show declining interest in public sector banks and increasing interest in private sector banks.

Only in the shareholder category of domestic financial institutions, the trend is similar in private sector and public sector banks otherwise in all the categories the trend is different.