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Purpose <p>The current study determines the association between country governance (CG) and non-performing loans (NPLs) in South Asian countries (Pakistan, India, and Bangladesh) for the period from 2000 to 2019.</p> Methodology <p>The current study determines the relationship by employing the fixed-effects method. This study retrieved data from 81 conventional banks in Pakistan, India, and Bangladesh from 2000 to 2019.</p> Results <p>Findings indicate a negative and significant relationship, suggesting that better country governance would reduce the NPLs. However, to ensure the consistency of results, the regression model is re-estimated for each country. The results of the single-country analysis show that improved country governance would reduce the NPLs.</p> Implications <p>The study's findings provide useful insights to policymakers for strategic decision-making regarding NPLs and are also related to country governance indicators.</p> Originality <p>The growing rates of NPLs in South Asian countries have motivated us to examine further internal and external factors that may significantly impact NPLs. The rise in NPLs is worrying as it may adversely affect the financial stability of banks and expose them to financial crises.</p>

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The nexus between country governance and non-performing loans in South Asian countries

  • 期刊论文

  • 出版模式：

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  • 发表日期：

    2025年7月4日

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  • Abdul Rehman,
  • Waqas Mehmood,
  • Fakir Al Gharaibeh

摘要

Purpose

The current study determines the association between country governance (CG) and non-performing loans (NPLs) in South Asian countries (Pakistan, India, and Bangladesh) for the period from 2000 to 2019.

Methodology

The current study determines the relationship by employing the fixed-effects method. This study retrieved data from 81 conventional banks in Pakistan, India, and Bangladesh from 2000 to 2019.

Results

Findings indicate a negative and significant relationship, suggesting that better country governance would reduce the NPLs. However, to ensure the consistency of results, the regression model is re-estimated for each country. The results of the single-country analysis show that improved country governance would reduce the NPLs.

Implications

The study's findings provide useful insights to policymakers for strategic decision-making regarding NPLs and are also related to country governance indicators.

Originality

The growing rates of NPLs in South Asian countries have motivated us to examine further internal and external factors that may significantly impact NPLs. The rise in NPLs is worrying as it may adversely affect the financial stability of banks and expose them to financial crises.