Credit Risk Analysis in

Indian Commercial BanksAn Empirical Investigation

Asia-Pacific Finance and Accounting Review

ISSN 2278-1838: Volume 1, No. 2, Jan - Mar 2013

Authors:
Swaranjeet Arora
Assistant Professor (SG), Prestige Institute of Management and Research, Indore, India. Email: [email protected]

Abstract
Risk exposure in banking system has increased due to fierce competition, changing socioeconomic patterns, market flexibility, and increased foreign exchange business and cross
border activities. These developments have resulted into various types of banking risks.
Credit risk, earlier present in the banking system has also increased and Credit risk analysis
has emerged as a big challenge for the Indian commercial banks. This paper attempts to
identify the factors that contribute to Credit Risk analysis in Indian banks and to compare
Credit Risk analysis practices followed by Indian public and private sector banks, the
empirical study has been conducted and views of employees of various banks have been
tested using statistical tools. Present study explored the phenomenon from different
perspectives and revealed that Credit Worthiness analysis and Collateral requirements are
the two important factors for analyzing Credit Risk. From the descriptive and analytical
results, it can be concluded that Indian banks efficiently manage credit risk. The results also
indicate that there is significant difference between the Indian Public and Private sector
banks in Analyzing Credit Risk.
Keywords: Risk management; Banks; Credit Risk

Introduction
Granting credit involves - accepting risk as well as
producing profits
-Bank for international settlements, Basel, Switzerland
There has been tremendous transition in the role of bank as
a financial intermediary. Before liberalization all the
activities of banks were regulated and hence operational
environment was not conducive to risk taking. Now, banks
have grown from being a financial intermediary into a risk
intermediary. Banks are exposed to severe competition and
hence are compelled to encounter various types of financial
and non-financial risks. Risks and uncertainties form an
integral part of banking which by nature entails taking
risks. Banks are now required to clearly discriminate
avoidable and unavoidable risks and are required to focus
on the extent to which such risks can be taken by banks.

The banking reforms and policy changes during the years

have gradually changed banking landscape and credit
market in India. First visible change is that banks are now
more customer focused and are providing innovative
products at fast pace, Second change is that deregulation
has made the banks free to formulate their own schemes
and products as per their market segment and risk appetite,
redesign business process and lending policies and
procedures to meet changing expectations of the customers
and the market. Thirdly, introduction of risk management
practices and implementation of Basel II recommendations
have brought in more professional approach in credit
delivery process which is now more risk focused and has
made pricing of loan-products dependent on risk
perception of the borrower and likely hood of default.
Fourth visible change is that banks are moving from so
called lazy banking to busy banking by aggressively

Swaranjeet Arora

expanding credit to retail, agriculture and small and

medium enterprises. Fifth visible change is that banks are
gradually becoming super market where they will not only
lend but also offer whole gamut of financial products
including third party products so that customer gets
opportunity to select best product at competitive price. All
these changes are on the one hand creating new business
opportunities and on the other hand also creating new
challenges, which banks will have to face boldly and
proactively (Mehrotra, 2005).

results into varying level of Credit Risk in different types of

banks. This paper is aimed to examine the degree to which
Indian banks analyze Credit Risk and attempts to identify
the factors that contribute to Credit Risk Analysis in
different commercial banks and to compare whether Public
and Private Sector banks efficiently analyze Credit risk.

Literature Review
Various researchers have studied reasons behind bank
problems and identified several factors (Santomero, 1997;
Basel, 1999, Basel, 2004). Bindseil, U. and Papadia, F. (2006)
reviewed the role and effects of the collateral frameworks
which central banks, and in particular the Euro system, use
in conducting temporary monetary policy operations.
They explained the design of such a framework from the
perspective of risk mitigation, which is the purpose of
collateralization. They identified that by means of
appropriate risk mitigation measures, the residual risk on
any potentially eligible asset can be equalized and brought
down to the level consistent with the risk tolerance of the
central bank. Once this result has been achieved, eligibility
decisions should be based on an economic cost-benefit
analysis. They also looked at the effects of the collateral
framework on financial markets, and in particular on
spreads between eligible and ineligible assets.

Banking risk results into Expected and Unexpected losses.

Banks rely on their capital as a buffer to absorb such losses.
Chakrabarti and Chawla (2005) suggested that banks must
plough back profit to build profound and solid reserve
base. According to experts banks need to maintain enough
capital for prudential corrective action to prevent any risk
(Bhat 2005). The efficiency of capital plays a major role in
this exercise and banks are advised to adopt risk
management practices. Eichengreen (1999) identifies the
policies of the new international financial architecture as
crisis prevention, crisis prediction and crisis management.
In spite of heavy regulations in the last two decades, many
developed and emerging countries have witnessed severe
banking crises. There is an imperative need to follow
internationally compatible prudential norms relating to
capital structure and supervisory norms. Banks are
required to develop the system which involves minimum
risk exposure.
Credit risk in commercial banks represents the most
important type of risk. Banks bear the credit risk attached to
bank loans and forward contracts. The risk of defaults or
protracted arrears on outstanding loan is termed as credit
risk (Tamimi, H. and Mazrooei, F., 2007). According to the
consultative paper issued by the Basel Committee on
Banking Supervision (1999), for most banks loans are the
largest and most obvious sources of credit risk. Credit Risk
is the potential that a bank borrower or counter party fails
to meet the obligations on agreed terms. It mainly arises
from the potential that a borrower or counterparty will fail
to perform on an obligation. It may arise from either an
inability or an unwillingness to perform in the precommitted contracted manner.

Gilbert and Wilson (1998) examined the impact of banking

deregulation on the productive efficiency of Korean
private banks during the 1980 and 1994 reporting
productive efficiency improvements following the 1980s
deregulation. A banking crisis can also be initiated by a
high level of unexpected non-performing loans in a bank.
When this information is known by the depositors, they
rush to the bank to get back their deposits before the other
depositors. If markets for liquidity are inefficient because
of market power or information asymmetries, liquidity
problems at healthy banks can turn into solvency
problems. In fact, in this case the bank is forced to sell its
long-term assets below their fair value, see, e.g., Allen and
Gale (1998), Bernanke and Gertler (1989), Donaldson
(1992), Kiyotaki and Moore (1997), and Kwan and Eisenbis
(1997) demonstrate that inefficient banks are more prone to
risk-taking.

Financial markets in developing economies are not sound

and efficient and are predominantly occupied by Stateowned firms. State-owned firms, especially in banking
sector, are commonly found in many developing countries
(La Porta et al. 2002). Banking Policies and Strategies are
formed depending upon type and structure of ownership
of a bank. Organizational culture, attitude and behaviors
also vary according to type of bank ownership i.e. Privateowned banks and state owned banks. This difference leads
to different levels of risk- taking behavior and banks
performance (Arora, S. and Jain, R.; 2011) and in turn

Relationship between capital, risk and efficiency varies for

banks with different ownership structures. However, there
is little empirical guidance to suggest whether there are
systematic differences in the relationship between risk
taking, capital strength and efficiency for banks with
different ownership features. Much of the literature on
banking in emerging markets focuses on either the broad
relationship between ownership and financial
performance (e.g., Sarkar, Sarkar and Bhaumik, 1998) or
the agency aspect of ownership, i.e., the impact of
separation between management and ownership on the
26

Credit Risk Analysis in Indian Commercial BanksAn Empirical Investigation

performance of banks (e.g., Gorton and Schmid, 1999;

Hirshey, 1999).

Scope and Design of the Study

The present investigation is based on exploratory research
inquiry and examines the Credit Risk Analysis process in
Public and Private sector banks. It is based on primary data
and compares Credit Risk Analysis process in Indian
Public and Private sector banks of Indore division. The data
was collected from sample of 200 employees of public and
private sector banks of Indore division. 50 respondents
were chosen from each bank viz SBI and Associates; Other
Nationalized Banks; Old Private Sector banks and New
Private Sector Banks. The respondents were selected
through non-probability convenience (judgmental)
sampling method.

Previous studies found that foreign-owned banks

outperform domestic-owned banks in developing
countries (Havrylchyk 2003). State-owned banks
underperform domestic-owned banks (Bonin et al. 2003;
Cornett, Guo, Khaksari, and Tehranian 2000). Bonin et al.
(2004) argued that over the second half of the 1990s, foreign
ownership in the banking sectors of transition countries
increased dramatically and the performance of foreign
owned banks were significantly higher than domestically
owned banks and the extent of such foreign ownership
impacted the bank efficiency significantly in eleven
transition countries.

As this research has a quantitative base so questionnaire

used in this research is close ended questionnaire. The
research instrument used to collect data was based on
questionnaire developed by Al-Tamimi and Al-Mazrooei
(2007). It included seven close-ended questions based on an
interval scale. Respondents were asked to indicate their
degree of agreement with each of the questions on a fivepoint Likert scale. The data were analyzed using window
based Statistical package of the Social Science (SPSS). The
statistical tools used were analysis of variance, Tukey
(HSD) test, Kaiser- Meyer- Olkin (KMO), Bartletts test,
Factor Analysis and mean were used to analyze the data.

The International Monetary Fund (2000) noted that

subsequent to privatization of banks in Bulgaria, following
the banking-currency crisis of 1996-97, the banking sector
was reluctant to lend in the high-risk environment,
resulting in a ratio of private sector credit to GDP of about
12 percent. This is compared to the optimal value of this
ratio for a country with Bulgarias per capita GDP of
around 30 percent. Latin American evidence suggests that
foreign banks are especially risk averse and that significant
market penetration by these banks in a developing
economy context might adversely affect credit disbursal to
small and medium enterprises (Clarke, Cull, DAmato and
Molinari, 1999; Clarke, Cull, and Peria 2001; Clarke, Cull,
Peria and Sanchez, 2002).

Questionnaire adopted in this study consisted of seven

questions. As the sample size was 200, item with
correlation value less than 0.1948 should be dropped. All
the items in the study had correlation values more than
0.1948 thus; no item was dropped from the questionnaire.
Reliability of the measures was assessed with the use of
Cronbachs alpha on all the seven items. Cronbachs alpha
allows us to measure the reliability of different variables. It
consists of estimates of how much variation in scores of
different variables is attributable to chance or random
errors (Selltiz et al., 1976). As a general rule, a coefficient
greater than or equal to 0.7 is considered acceptable and a
good indication of construct reliability (Nunnally, 1978).
The Cronbachs alpha for the questionnaire was 0.813.
Hence, it was found reliable for further analysis.

Coleman, L. (2007) provided a practical explanation of the

risk taking behavior of finance executives and confirms
that context is more important to decisions than their
content. He also explored reasons for decision makers
facing choices preferring a risky alternative. He finally
identified the risk propensity and quantified it by
respondents attitude towards a risky decision, and also
explained decision maker traits using independent
variables. Oldfield and Santomero (1997) investigated risk
management in financial institutions. In this study, they
suggested four steps for active risk management
techniques:
1. The establishment of standards and reports;
2. The imposition of position limits and rules (i.e.
contemporary exposures, credit limits and position
concentration);
3. The creation of self investment guidelines and
strategies; and
4. The alignment of incentive contracts and
compensation (performance-based compensation
contracts).

Objectives
1.
2.
3.

27

To compare whether Public and Private Sector banks

analyze Credit Risk efficiently.
To explore the factors contributing to Credit Risk
Analysis in banks.
To open up new vistas of research and develop a base
for application of the findings in terms of implications
of the study.

Swaranjeet Arora

Hypotheses

Results of Factor Analysis

H01 :

There is no correlation among seven variables in the

population under study.

H02 :

There is no significant difference between SBI and

Associates, Other Public sector Banks, New Private
Sector Banks and Old Private sector Banks in practice
of Credit Risk Analysis.

H03 :

There is no significant difference between SBI and

Associates and Other Public sector Banks in practice
of Credit Risk Analysis.

H04 :

There is no significant difference between SBI and

Associates and New Private Sector Banks in practice
of Credit Risk Analysis.

Credit worthiness Analysis: It represents specific and

overall analysis of clients in respect of loan granted to them
in order to reduce credit risk. It is measured by items 2, 1, 3,
7 and 6 as identified in table 3. These items are Before
granting loans your bank undertake a specific analysis
including the clients characters, capacity, collateral capital
and conditions, This bank undertakes a credit
worthiness analysis before granting loans, This banks
borrowers are classified according to a risk factor (risk
rating), The level of credit granted to defaulted clients
must be reduced and It is preferable to require collateral
against some loans and not all of them table 2 display that
Variable 2 is strongest and explains 44.00 per cent variance
and has total factor load of 0.842.

H05 :

There is no significant difference between SBI and

Associates and Old Private sector Banks in practice
of Credit Risk Analysis.

H06 :

There is no significant difference between Other

Public sector Banks and New Private Sector Banks in
practice of Credit Risk Analysis.

H07 :

There is no significant difference between Other

Public sector Banks and Old Private Sector Banks in
practice of Credit Risk Analysis.

H08 :

There is no significant difference between Old

private sector banks and New Private Sector Banks
in practice of Credit Risk Analysis.

Collateral Requirement: It represents guarantee against

the loan granted so as to reduce credit risk of the bank. It is
measured by items 4 and 5 as identified in table 3. These
items are It is essential to require sufficient collateral from
the small borrowers and This banks policy requires
collateral for all granting loans table 1 display that
variable 4 is strongest and explain 72.28 percent variance
and has total factor load of 0.913.
Results of ANOVA
To test the significance of variance and understand interlevel difference between and within group treatments, the
data were treated with F-test analysis (Table-4).
H02 stands rejected
Credit Risk analysis in SBI and associates, Other Public
sector banks, Old Private sector banks and New Private
sector banks significantly differ in their mean values (F=
26.242 and p< 0.01). Old Private sector banks has highest
mean value of 212, hence have better Credit Risk analysis.
New Private Sector banks with mean value of 199.5, SBI
and associates with mean values of 178.5 and Other Public
sector banks with mean value of 168 represents that Credit
Risk analysis in these banks are comparatively less
effective.

Results and Discussion

To test the correlation among all the variables in the
population under study, Kaiser- Meyer- Olkin (KMO)
measure of sampling adequacy and the Bartletts test of
sphericity were performed and to test the significance of
variance and understand inter-level difference between
and within group treatments, the data were treated with Ftest analysis.

To test the significance of difference between means of each

of the subgroups Tucky test was applied (Table-5)

Results of KMO and Bartletts test of sphericity

As indicated in Table-1 the generated score of KMO was
0.676, reasonably supporting the appropriateness of using
factor analysis. The Bartletts test of sphericity was highly
significant (p<0.01), rejecting the null hypothesis (H01) that
the seven variables are uncorrelated in the population.
Using Principal components with varimax rotation only
attributes with factor loadings of 0.5 or greater on a factor
were regarded as significant. The factor analysis generated
two factors explaining 72.28% of the variability in the
original data.

H03 stands accepted

Credit Risk analysis in SBI and associates and Other Public
sector banks do not significantly differ in their mean values
(p> 0.05); this means null hypothesis H03 cannot be rejected
at 5% significance level and it can be inferred that there is no
significant difference between Credit Risk analysis in SBI
and Associates (X =178.5) and Other Public sector Banks (X
=168).

28

Credit Risk Analysis in Indian Commercial BanksAn Empirical Investigation

H04 stands rejected

Credit Risk analysis in New Private Sector Banks and SBI
and associates significantly differ in their mean values
(p<0.05); this means null hypothesis H04 can be rejected at
5% significance level and it can be inferred that Credit Risk
analysis in New Private Sector Banks (X =199.5) is
significantly better then SBI and Associates (X =178.5).

applied to a database of banks from emerging economies,

they confirmed the role of the institutional and regulatory
environment as a source of excess credit risk, which
increases a bank's default risk.
Salas and Saurina (2002) examined credit risk in Spanish
commercial and savings banks; they used panel data to
compare the determinants of problem loans of Spanish
commercial and savings banks in the period 1985-1997,
taking into account both macroeconomic and individual
bank-level variables. The GDP growth rate, firms, family
indebtedness, rapid past credit or branch expansion,
inefficiency, portfolio composition, size, net interest
margin, capital ratio and market power are variables that
explain credit risk. Their findings raise important bank
supervisory policy issues: the use of bank-level variables as
early warning indicators, the advantages of mergers of
banks from different regions, and the role of banking
competition and ownership in determining credit risk.

H05 stands rejected

Credit Risk analysis in Old Private sector Banks and SBI
and associates significantly differ in their mean values
(p<0.05); this means null hypothesis H05 can be rejected at
5% significance level and it can be inferred that Credit Risk
analysis in Old Private sector Banks (X =212) is significantly
better then SBI and Associates (X =178.5).
H06 stands rejected
Credit Risk analysis in New Private sector Banks and Other
Public sector Banks significantly differ in their mean values
(p<0.05); this means null hypothesis H06 can be rejected at
5% significance level and it can be inferred that Credit Risk
analysis in New Private Sector Banks (X=199.5) is
significantly better than Other Public sector Banks (X=168)

Al-Tamimi (2002) investigated the degree to which the

UAE commercial banks use risks management techniques
in dealing with different types of risk. The study found that
the UAE commercial banks were mainly facing credit risk.
The study also found that inspection by branch managers
and financial statement analysis were the main methods
used in risk identification. The main techniques used in risk
management according to this study were establishing
standards, credit score, credit worthiness analysis, risk
rating and collateral; the study also highlighted the
willingness of the UAE commercial banks to use the most
sophisticated risk management techniques, and
recommended the adoption of a conservative credit policy.

H07 stands rejected

Credit Risk analysis in Old Private Sector Banks and Other
Public sector Banks significantly differ in their mean values
(p<0.05); this means null hypothesis H07 can be rejected at
5% significance level and it can be inferred that Credit Risk
analysis in Old Private Sector Banks (X = 212) is
significantly better than Other Public sector Banks (X =168)
H08 stands accepted
Credit Risk analysis in Old Private Sector Banks and New
Private Sector Banks do not significantly differ in their
mean values (p> 0.05); this means null hypothesis H08
cannot be rejected at 5% significance level and it can be
inferred that there is no significant difference between
Credit Risk analysis in Old Private Sector Banks (X =212)
and New Private Sector Banks (X =199.5). significantly.

Bindseil, U. and Papadia, F. (2006) reviewed the role and

effects of the collateral frameworks which central banks,
and in particular the Euro system, use in conducting
temporary monetary policy operations. They explained the
design of such a framework from the perspective of risk
mitigation, which is the purpose of collateralization. They
identified that by means of appropriate risk mitigation
measures, the residual risk on any potentially eligible asset
can be equalized and brought down to the level consistent
with the risk tolerance of the central bank. Once this result
has been achieved, eligibility decisions should be based on
an economic cost-benefit analysis. They also looked at the
effects of the collateral framework on financial markets,
and in particular on spreads between eligible and ineligible
assets.

A body of literature on consumer lending has shown that

asymmetric information may prevent the efficient
allocation of lending, resulting in credit rationing (Jaffee
and Russell, 1976; Stiglitz and Weiss, 1981). According to
this literature, because of the existence of informational
asymmetries, lenders fail to observe some relevant
characteristics of potential borrowers and have no way of
learning about them. Were full information available, the
volume and distribution of lending would doubtless be
very different from the outcome under asymmetric
information (deMeza and Webb, 2000). Godlewski (2006)
investigated regulatory and institutional determinants of
credit risk taking and bank's default probability in
emerging market economies. Using a two step logit model

Powell et. al. (2004) analyzed how data in public credit

registries can be used to strengthen bank supervision and
to improve the quality of credit analysis by financial
institutions. The study was performed in central banks of
Argentina, Brazil and Mexico. The results of the empirical

29

Swaranjeet Arora

tests explored that credit analysis enhances credit risk for

capital and provisioning requirements and acts as a check
on a banks internal ratings for the Basel IIs internal ratingbased approach. Arora, S.; Chatterjee, A. and Hyde, A.
(2007) analyzed credit risk management system employed
by Public and Private sector banks in India. They found that
Net NPA to Net Advances ratio, Gross NPA to Gross
Advances ratio & Credit Deposit ratio are important
parameters while evaluating Credit risk management
systems of banks. They also found that Credit Risk
management system of banks can be improved if proper
emphasis is given to these parameters.

same methodology. Different and interesting results may

be expected, because credit risk Analysis is affected by
specific factors such as economic conditions, competition
and regulations.

Conclusion
This paper examined Credit Risk analysis system in Public
and Private sector banks of India. Credit risk Analysis is
crucial because no single database typically houses all of
the risk related data and several years of information is
required. The present study has indicated that Credit
Worthiness analysis and Collateral requirements are the
two important factors for analyzing Credit Risk. From the
descriptive and analytical results, it can be concluded that
Indian banks efficiently manage credit risk. The results also
indicate that there is a significant difference between the
Indian Public and Private sector banks in Credit Risk
Analysis. Credit Risk Analysis is better in Old Private
sector banks and New Private Sector banks, as compared to
State Bank of India and its associates and other public
sector banks. This reflects that in order to improve Credit
Risk Analysis system in banks, efforts should be made to
train the employees so as to improve their understanding
of credit risk, proper credit risk identification,
measurement, monitoring and control system should be
implemented throughout the bank and in the process due
emphasis is required to be given to Credit Worthiness
analysis and Collateral requirements.

Jayadev (2006) identified a set of actions to improve the

quality of internal rating models of Indian banks by
analyzing internal credit rating practices of Indian banks.
The survey revealed that the components of internal rating
systems, their architecture, and operation differ
substantially across banks. The range of grades and risks
associated with each grade also varied across the banks
analyzed which implied that lending decisions may vary
across banks. There were differences among the rating
systems of various banks. Arora, S. and Jain, R.(2011)
identified the factors that contribute to Risk Assessment
and Analysis in Indian banks and found that Risk
Measurement and Probability of occurrences were the two
factors for Risk Assessment and Analysis. They also
concluded that Indian banks efficiently assess and analyze
risk in general but there was significant difference between
the public and private sector banks in Risk assessment and
analysis.

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Areas for Further Research

In present study an attempt has been made to cover most of
the aspects of Credit risk Analysis. However, this paper did
not address in detail credit risk practices adopted by Indian
commercial banks. This type of study can be addressed in
future studies as credit risk represents the most challenging
type of risk. Further research can also be done on Basel II
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30

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Swaranjeet Arora

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Appendix
Banks Risk Management Scale
Authors-Al-Tamimi and Al-Mazrooei (2007)
Instructions
Please read the questions carefully and mark (X) at the appropriate place in one of the five columns, as the
case may be. The questionnaire is designed to know your opinion in general. Please note it is not to test
policies of your banks. There is no right or wrong answer. The data is being collected for purely academic
purpose.
General Information
Name of the Bank
Name of the employee (optional)
Designation
STATEMENT

:
:
:
Strongly
Disagree

Disagree

Neutral

Agree

1. This bank undertakes a credit

worthiness analysis before granting
loans
2. Before granting loans your bank
undertake a specific analysis including
the clients characters, capacity,
collateral capital and conditions
3. This banks borrowers are classified
according to a risk factor (risk rating)
4. It is essential to require sufficient
collateral from the small borrowers
5. This banks policy requires collateral
for all granting loans
6. It is preferable to require collateral
against some loans and not all of them
7. The level of credit granted to
defaulted clients must be reduced

Table 1: Result of the KMO and Bartletts test

for Risk Assessment and Analysis
Kaiser-Meyer-Olkin Measure of Sampling Adequacy
Bartletts test of Sphericity
Approx. chi square
df
Sig.

32

0.676
728.998
21
0.000

Strongly
Agree

Credit Risk Analysis in Indian Commercial BanksAn Empirical Investigation

Table 2: Rotated Factor Matrix for Credit Risk Analysis

Var. No.
V1

F1
0.815

V2
V3
V4
V5
V6
V7
Eigen value
Cumulative variance

0.842
0.775

F2

Communalities
0.669

0.913
0.887
0.687
0.770
3.46
44.00

0.792
0.681
0.838
0.822
0.593
0.664

1.60
72.29

Note: F1 and F2 are two derived factors.

Table 3: Factors of Credit Risk Analysis
Sl.
No.
1

FACTOR

Item

Credit
Worthiness
Analysis

Clients
Character,
capacity,
capital,
collateral
and
conditions
Analyses
(3.9)
Collateral
Collateral
Requirements requirements
from small
borrowers
(3.6)

Item

Item

Item

Item

Credit
worthiness
Analysis
(3.8)

Risk
Rating
(4.2)

Less credit
to
defaulted
clients
(3.8)

Collateral
against
some
loans
(3.8)

Collateral
for all
granting
loans (3.4)

The figures in parenthesis represent the average scores for the variables under
each Factor that determine Credit Risk Analysis.
Table 4: Results of One Way ANOVA Credit Risk Analysis

Between
Groups
Within
Groups
Total

Sum of
Df
Squares
23.99608 3

Mean
F
Square
7.998693 26.24193

59.74194 196

0.305

83.73802 199

*The mean difference is significant at the 0.01 level.

33

Sig.
.000

Swaranjeet Arora

Table 5: Post Hoc Test-Credit Risk Analysis

Mean
Std.
Difference Error
(I-J)
(I)
Tukey SBI
HSD

NEW
PVT

PUB

OLD
PVT

-0.424
0.2098
-0.672

0.110418
0.110418
0.110418

95%
Confidence
Interval
Lower
Upper
Bound
Bound
.001 -0.710
-0.138
.231 -0.076
0.496
.000 -0.959
-0.387

0.4244
0.6342
-0.248

0.110418
0.110418
0.110418

.001
.000
.114

0.138
0.348
-0.535

0.711
0.920
0.038

-0.209
-0.634
-0.882

0.110418
0.110418
0.110418

.231
.000
.000

-0.496
-0.920
-1.169

0.076
-0.348
-0.596

0.6728
0.2484
0.8826

0.110418
0.110418
0.110418

.000
.114
.000

0.387
-0.038
0.596

0.959
0.535
1.169

(J)
NEW
PVT
PUB
OLD
PVT
SBI
PUB
OLD
PVT
SBI
NEW
PVT
OLD
PVT
SBI
NEW
PVT
PUB

*The mean difference is significant at the .05 level.

34

Sig.