Author(s) :

Shubhanshu Shekhar Singh.

Volume/Issue :

Abstract :

This research investigates the effects of inflation on the banking and financial services sector, focusing on how rising prices and the associated economic conditions influence financial institutions' operations, profitability, and risk management strategies. Inflation can create both challenges and opportunities within the sector, impacting lending rates, deposit growth, asset prices, and the overall economic stability. On one hand, higher inflation often leads to tighter monetary policies, which can raise interest rates, affecting loan demand and credit risk. On the other hand, banks may benefit from higher returns on loans and securities, although they may also face rising operational costs and a decline in consumer purchasing power. Additionally, inflation can alter the risk appetite of both lenders and investors, potentially increasing volatility in financial markets. This paper explores the complex interactions between inflationary pressures and financial performance, using case studies and empirical data to analyze how banks and financial service providers adapt to inflationary environments. The study concludes by offering policy recommendations for financial institutions and regulators to mitigate the negative effects of inflation and leverage potential benefits.

No. of Downloads :

0