• Impact of FDI on the Capital Adequacy Ratio (CAR) of the Selected Private Sector Banks

Dr. Rakesh Kumar Prof. (Dr.) Surinder Singh

Abstract:
The present study examined the impact of Foreign Direct Investment (FDI) on the Capital Adequacy Ratio (CAR) of the selected private sector banks. The required data are mainly collected from RBI Data warehouse, Report on Trends and Progress of Banking in India, IBA Bulletins, Journals and Online database. Linear Regression technique has been used to study the correlationamong the variables and examine the impact of the independent variable (FDI)on dependent variable (CAR).Further, ANOVA and independent Sample t-test have been used to test the research hypotheses and validate the results of the study.The study found that there is no significant relationship between the FDI (independent variables) and CAR (independent variables). The CAR (dependent variable) is explained by the FDI (independent variables) to the level of 21 percent only andthere is no significant impact of FDI on the CAR of the selected private sector banks.It is recommended thatthe capital raising capacity in India is very less, hencethe country should requiredmore investment from outside to take the Indian banking sector to worldwide.