DETERMINANTS OF BANK PERFORMANCE: EVIDENCE FROM THE INDIAN COMMERCIAL BANKS Kandela Ramesh* INTRODUCTION Reserve Bank of India (RBI) or Government of India is modifed Banking sector reforms for the advancement of Indian banking performance. Banks are contributing resources for building nation’s economy. Banking performance signifcantly impacts on economic growth. So banks require being proftable. However, bank’s performance can be affected by remarkable factors. These factors are categorised into internal (bank specifc) and external factors (macroeconomic). The internal factors are individual bank characteristics which affect the bank performance. These elements are controlled by the internal decisions of the management of the bank. Recent studies dedicated to the analysis of bank performance, such as those of (Naifar, 2015) and (Nouaili, Abaoub, & Ochi, 2015) for Tunisian Bank performance. (Petria, Capraru, & Ihnatov, 2015) for the EU27 banking system. Commercial banks performance in Kenya (Ongore & Kusa, 2013). The Greek bank Proftability (Alexiou & Sofoklis, 2009). (Dietrich & Wanzenried, 2011) for banks in Switzerland. They were focusing on the internal and external factors which infuence the bank’s performance. This paper examines to determine the leading internal factors that are infuencing the performance of the Indian commercial banks using a panel data analysis on a sample of 39 Indian commercial banks over the period 2009 to 2017. This research is required for the management of banks to know why the performance of one bank is different from another. The bank performance variation analysed by the major factors which infuence banks’ performance. This research may be the need for banks to grasp the determinants which are contributing positively to the performance of the bank and simultaneously to know the factors that are adding negatively to the performance of the bank. Banks should tackle negatively infuencing factors. Here bank performance indicators considered the return on assets, return on equity. Moreover, distinguishing internal factors are capital adequacy ratio, credit-deposit ratio, cost of funds, the ratio of non-interest income to total assets, and investment deposit ratio, ratio of intermediation cost to total assets, net interest margin, the ratio of net NPA to net advances. Rest of the paper is organised around the following sections. Section 2 gives a review of the literature regarding the determinants of banks performance, while Section 3 presents the conceptual framework of the study. Section 4 deals with the database of the research, variable description and empirical model. And section 5 discusses the empirical results. Finally, the conclusions implications in section 6 and Limitations, Scope for further research in section 7. * UGC-Senior Research Fellow, Department of Business Management, Osmania University, Hyderabad, Telangana, India. Email: kandelaramesh@osmania.ac.in Abstract Banking performance signifcantly impacts on economic growth. However, bank’s performance can be affected by remarkable factors. The present study aims to identify the bank-specifc factors that determine the performance of the Indian commercial banks. Return on Assets and Return on Equity are considering the indicators of bank performance. A fxed effect and random effect panel regression models have been applied to a dataset of 39 commercial banks for the post-crisis period 2009 to 2017. Based on panel data analysis, results reveal that Capital adequacy ratio has a signifcant effect on return on assets while the insignifcant impact on return on equity. Intermediation cost to total assets and Nonperforming assets were negatively infuencing the performance of the banks. Non-interest income and Net interest margin showed a positive effect on banks performance. Credit deposit ratio, Investment deposit ratio, Cost of funds were not signifcant determinants of Indian commercial banks performance. Keywords: Bank Performance, Return on Assets, Return on Equity, Non-Interest Income, Net Interest Margin, Intermediation Cost, NPA JEL Classifcation: C1, C5, C9, G2, M1, Z1 Journal of Commerce & Accounting Research 8 (2) 2019, 66-71 http://publishingindia.com/jcar/