Effectiveness of Information Disclosure of Indian Public Sector Banks on Their Web Sites -An Empirical Study

The Internet has emerged as a recent medium of presentation of banks’ information. This study is an attempt to examine the degree of effectiveness of information disclosure of banks on their websites. For the purpose of this study, a list of items of information disclosure was prepared and subsequently they were classified into four attributes such as general attribute, financial attribute, investor attribute, and corporate governance attribute. In order to measure the level of information disclosure by banks, a Bank Disclosure Attribute Index was constructed and scores were assigned for each attribute and finally overall disclosure score for each bank was arrived at using BDAI. Each bank's website was explored to identify the availability of the above attributes. The sample for this study includes all the Indian public sector banks, numbering twenty seven. This study used statistical tools such as Chi Square Test, Multiple Correlation and ANOVA. It is found that the majority of the Indian public sector banks are not disclosing required information adequately. Further, there is no uniformity among the banks in each of the attributes. It is also found that there is significant correlation between overall information disclosure and four categories of attributes such as general attribute, financial attribute, investor attribute, and corporate governance attribute. In the context of the qualitative characteristics identified by the International Accounting Standards Board Framework, adopted by national jurisdictions, inadequate and non-uniform disclosure would compromise quality, relevance, usefulness and timeliness of reporting information on the internet. Thus, the public sector banks have to improve their effectiveness of disclosure to make the internet a more reliable source for presentation of reporting information than ever before.