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Banking Reform in India∗ - page 54 / 57

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(1)b

(2)c

(3)c

(4)d

(5)d

Indicator for Vigilance Activity Indicator for fraud in: Contemporaneous

-0.055 (0.027)

-0.040 (0.019)

-0.037 (0.019)

-0.042 (0.020)

-0.037 (0.020)

Indicators for Vigilance Activity(4) Three Months

-0.039 (0.018)

-0.032 (0.016)

-0.035 (0.016)

-0.031 (0.016)

-0.023

-0.029

-0.027

(0.014)

(0.015)

(0.014)

-0.018

-0.018

-0.015

(0.012)

(0.014)

(0.010)

-0.028

-0.006

(0.013)

(0.010)

-0.012

-0.001

(0.013)

(0.011)

-0.014

0.009

(0.015)

(0.008)

-0.022

0.022

(0.028)

(0.015)

Y

Y

Y

Y

Y

Y

Table 9: The Effect of Vigilance Activity on credita

Dependent Variable: Log Credit

Past Months

Future Months

Source: Authors' cacluations from data from the Reserve bank of India and Central Vigilance Commission

Six Months

Twelve Months

Eighteen Months

Twenty-Four Months

  • -

    0.031

(0.016)

  • -

    0.036

(0.016)

Y Y

Thirty-Six Months

Forty-Eight Months

Month Fixed Effects Bank Fixed Effects

Y Y

a - Columns (1)-(6) present panel regressions of log credit extended by twenty-seven public sector banks, over a period of 111 months, giving 2997 observations. Standard errors (robust to heteroskedasticity and serial correlation) are reported in parentheses. The independent variable of interest is a dummy variable indicating whether the CVC had charged or punished an officer of a particular bank in a particular month. b - Column (1) displays the results of regressing log credit on bank and year fixed effects, as well as a dummy for whether there was vigilance activity in a particular bank that month. c - Columns (2) and (3) examine how the effect persists over time. In column (2), log credit is regressed on dummies for whether there was vigilance activity in a bank for the previous one, two, three, …, twelve months. For readability, only the coefficients for contemporaneous, three, six, and twelve months are reported. Column three traces the effects over the past 48 months: again, only coefficients for the contemporaneous effect, and months 3, 6, 12, 18, 24, 36, and 48 are reported. d - Columns (5) and (6) measure the effect of future vigilance activity on lending. For example, the "Three Months" coefficient in column 5 and six is a dummy for whether there is vigilance activity at time t+3. Dummies are included for each future month up to twelve months ahead in column (5), and up to 48 months ahead in column (6).

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