Funding Liquidity and Risk-Taking Behavior of Banks in India Silu Muduli, Shridhar Kumar Dash Journal of Emerging Market Finance, 2025 This study, utilizing bank-level data for India, investigates the relationship between funding liquidity and banks’ risk-taking behavior. The study uses two risk measures: risk-weighted assets (encompassing credit, market, and operational risk) and liquidity creation (encompassing intermediacy risk). Findings reveal that banks with higher funding liquidity exhibit higher risk-taking behavior. This risk-taking behavior is more pronounced during economic recuperation and expansionary monetary policy phases. Notably, during economic recuperation, banks display heightened intermediacy risk, contrasting with the absence of such evidence during expansionary monetary policy phases. Larger banks with higher deposit shares demonstrate lower risk-taking behavior. Additionally, banks with a return on equity (ROE) below the average ROE exhibit a proclivity for increased risk-taking. This study advocates for liquidity regulation as a crucial complement to bank capital regulation, offering empirical support for moderate risk-taking among highly liquid banks and fortify their balance sheets for a stable banking system in India. JEL Codes: E32, E52, G21, G28
Taming Inflation by Anchoring Inflation Expectations Economic and Political Weekly, 2023
Bank capital and monetary policy transmission in India Silu Muduli, Harendra Behera Macroeconomics and Finance in Emerging Market Economies, 2023 This paper examines the role of bank capital in monetary policy transmission in India during the post-global financial crisis period. Empirical results show that banks with higher capital-to-risk-weighted assets ratio (CRAR) raise funds at a lower cost. Additionally, banks with higher CRAR transmit monetary policy impulses smoothly, while stressed assets in the banking sector hinder transmission. Recapitalization to raise CRAR can improve transmission; however, CRAR above a certain threshold level may not help as the sensitivity of loan growth to monetary policy rate reduces for banks with CRAR above the threshold. Therefore, it can be concluded that monetary policy can influence the credit supply of banks depending on their capital position.
Loan Repayment Dynamics of Self-help Groups in India Silu Muduli, Manu Sharma Margin, 2022 The overall ratio of non-performing assets (NPAs) to total advances (the NPA ratio) extended to self-help groups (SHGs) has historically remained below 8 per cent in India. However, in the central, northern, and north-eastern regions of India, this ratio is relatively high and has remained above 15 per cent since 2015–2016. Using state-level data, the study identifies SHG-specific and state-specific factors that might be responsible for higher NPAs ratios. It also examines whether higher NPAs constrain access to future credit. Spatial analysis confirms the existence of geographical clustering of NPAs in the northern and central regions of the country. SHGs with lower outstanding loans and lower savings are more likely to default, the relationship being stronger in states with higher NPAs. The article finds that states with higher SHGs densities, per capita incomes, and road and railway connectivity, and lower infant mortality rates have lower NPAs in their SHGs. SHGs with lower savings and higher NPAs operating in states with lower per capita incomes and banking penetration face difficulties accessing fresh credits. JEL Codes: G21, O18, R51
NPAs of SHGs in India: Behavioural aspects Economic and Political Weekly, 2021
Inflation expectations of households: do they influence wage-price dynamics in India? Sitikantha Pattanaik, Silu Muduli, Soumyajit Ray Macroeconomics and Finance in Emerging Market Economies, 2020 This paper examines the usefulness of survey-based measures of inflation expectations to predict inflation using hybrid versions of New Keynesian Phillips Curve (NKPC). While both 3 months ahead and 1-year ahead inflation expectations of households emerge statistically significant in explaining and predicting inflation in India, effectively they work as substitutes of backward looking expectations given that household expectations are found to be largely adaptive. Unlike in other countries, this paper does not find much evidence on flattening of the Phillips curve. Also, no robust evidence is found on expectations induced wage pressures influencing CPI inflation.
The invisible collateral Economic and Political Weekly, 2019
RECENT SCHOLAR PUBLICATIONS
An Anatomy of Credit-Deposit Ratios Among Indian States S Muduli, T Behera The IUP Journal of Applied Economics 25 (1), 44-63 , 2026 2026 Citations: 2
Post-pandemic Credit Allocation and Real Economic Activities: Evidence from Indian Firms A Agarwal, R Bansal, S Muduli Journal of Quantitative Economics 23 (1), 85-103 , 2025 2025
Funding Liquidity and Risk-Taking Behavior of Banks in India S Muduli, SK Dash Journal of Emerging Market Finance 24 (1), 37-62 , 2025 2025 Citations: 1
COVID-19 and Performance of MSME Clusters in India S Muduli, R Das, D Rejith, A Acharya, R Golait, A Shivhare RBI Bulletin 78 (10), 235-254 , 2024 2024
Creditworthiness: The Role of Trust in the Socioeconomic Network S Muduli, SK Dash Journal of Quantitative Economics 22 (3), 571-588 , 2024 2024 Citations: 2
Low Stagflation Risk in India DP Rath, S Muduli, H Shekhar RBI Bulletin 77 (12), 93-104 , 2023 2023 Citations: 2
Taming inflation by anchoring inflation expectations S Pattanaik, GV Nadhanael, S Muduli Economic and Political Weekly 58 (22), 33-41 , 2023 2023 Citations: 12
Tail Risks of Inflation in India S Muduli, H Shekhar 2023 Citations: 6
Bank capital and monetary policy transmission in India S Muduli, H Behera Macroeconomics and Finance in Emerging Market Economies 16 (1), 32-56 , 2023 2023 Citations: 27
Assessing inflation expectations adjusting for Households’ Biases S Muduli, GV Nadhanael, S Pattanaik RBI Bulletin 76 (12), 97-107 , 2022 2022 Citations: 8
Loan repayment dynamics of self-help groups in India S Muduli, M Sharma Margin: The Journal of Applied Economic Research 16 (2), 183-202 , 2022 2022 Citations: 10
Zombies and the Process of Creative Destruction S Pattanaik, S Muduli, J Jose RBI Bulletin 76 (2), 53-66 , 2022 2022 Citations: 9
Does Anchoring of Inflation Expectations Promote Monetary Policy Transmission in India? S Muduli 2022
Capital Flows at Risk: India’s Experience S Muduli, H Behera, MD Patra RBI Bulletin 76 (6), 73-88 , 2022 2022 Citations: 4
Impact of COVID-19 Packages on MSME Financing in India S Muduli Kiel, Hamburg: ZBW-Leibniz Information Centre for Economics , 2022 2022 Citations: 3
NPAs of SHGs in India: Behavioural Aspects S Muduli Economic and Political Weekly 56 (32), 4-5 , 2021 2021
NPAs of SHGs in India: Behavioural Aspects S Muduli Economic and Political Weekly 56 (32), 4-5 , 2021 2021
Inflation expectations of households: do they influence wage-price dynamics in India? S Pattanaik, S Muduli, S Ray Macroeconomics and Finance in Emerging Market Economies 13 (3), 244-263 , 2020 2020 Citations: 44
Measuring financial capability of the street vendors DV Ramana, S Muduli Available at SSRN 3433606 , 2019 2019 Citations: 18
The invisible collateral S Muduli, SK Dash Economic and Political Weekly 54 (48), 13-16 , 2019 2019 Citations: 2
MOST CITED SCHOLAR PUBLICATIONS
Inflation expectations of households: do they influence wage-price dynamics in India? S Pattanaik, S Muduli, S Ray Macroeconomics and Finance in Emerging Market Economies 13 (3), 244-263 , 2020 2020 Citations: 44
Bank capital and monetary policy transmission in India S Muduli, H Behera Macroeconomics and Finance in Emerging Market Economies 16 (1), 32-56 , 2023 2023 Citations: 27
Measuring financial capability of the street vendors DV Ramana, S Muduli Available at SSRN 3433606 , 2019 2019 Citations: 18
Taming inflation by anchoring inflation expectations S Pattanaik, GV Nadhanael, S Muduli Economic and Political Weekly 58 (22), 33-41 , 2023 2023 Citations: 12
Loan repayment dynamics of self-help groups in India S Muduli, M Sharma Margin: The Journal of Applied Economic Research 16 (2), 183-202 , 2022 2022 Citations: 10
Zombies and the Process of Creative Destruction S Pattanaik, S Muduli, J Jose RBI Bulletin 76 (2), 53-66 , 2022 2022 Citations: 9
Assessing inflation expectations adjusting for Households’ Biases S Muduli, GV Nadhanael, S Pattanaik RBI Bulletin 76 (12), 97-107 , 2022 2022 Citations: 8
Tail Risks of Inflation in India S Muduli, H Shekhar 2023 Citations: 6
Capital Flows at Risk: India’s Experience S Muduli, H Behera, MD Patra RBI Bulletin 76 (6), 73-88 , 2022 2022 Citations: 4
Impact of COVID-19 Packages on MSME Financing in India S Muduli Kiel, Hamburg: ZBW-Leibniz Information Centre for Economics , 2022 2022 Citations: 3
An Anatomy of Credit-Deposit Ratios Among Indian States S Muduli, T Behera The IUP Journal of Applied Economics 25 (1), 44-63 , 2026 2026 Citations: 2
Creditworthiness: The Role of Trust in the Socioeconomic Network S Muduli, SK Dash Journal of Quantitative Economics 22 (3), 571-588 , 2024 2024 Citations: 2
Low Stagflation Risk in India DP Rath, S Muduli, H Shekhar RBI Bulletin 77 (12), 93-104 , 2023 2023 Citations: 2
The invisible collateral S Muduli, SK Dash Economic and Political Weekly 54 (48), 13-16 , 2019 2019 Citations: 2
Inter-temporal Calculative Trust Design to Reduce Collateral Need for Business Credits SK Dash, S Muduli Reserve Bank of India Occasional Papers 38 (1), 65-83 , 2018 2018 Citations: 2
Funding Liquidity and Risk-Taking Behavior of Banks in India S Muduli, SK Dash Journal of Emerging Market Finance 24 (1), 37-62 , 2025 2025 Citations: 1
Post-pandemic Credit Allocation and Real Economic Activities: Evidence from Indian Firms A Agarwal, R Bansal, S Muduli Journal of Quantitative Economics 23 (1), 85-103 , 2025 2025
COVID-19 and Performance of MSME Clusters in India S Muduli, R Das, D Rejith, A Acharya, R Golait, A Shivhare RBI Bulletin 78 (10), 235-254 , 2024 2024
Does Anchoring of Inflation Expectations Promote Monetary Policy Transmission in India? S Muduli 2022
NPAs of SHGs in India: Behavioural Aspects S Muduli Economic and Political Weekly 56 (32), 4-5 , 2021 2021
