A Comparative Study of Banking in China and India, Nonperforming Loans and the Level Playing Field

Abstract

This paper compares the operative performances of the banking institutions in China and India, taking into account the contentious issue of institutional differences in the banking sectors of these two economies, as reflected in the generation of non-performing loans. The study also examines the issue of using of non-performing loans to provide countervailable subsidies to exporting organizations. Our results show that the efficiency differences between banks in these two countries can be related directly to their institutional differences.

Keywords: Technical Efficiency, Non-Performing Loans, Subsidies

JEL Classification: G 21, H 25