Title: Impact of board gender diversity on priority sector lending and insolvency risk: evidence from the Indian banking industry

Authors: Monika Bhatia; Pritpal Singh Bhullar; Dipayan Roy; Pradeep Kumar Gupta

Addresses: University Business School, Maharaja Ranjit Singh Punjab Technical University, Bathinda, India ' University Business School, Maharaja Ranjit Singh Punjab Technical University, Bathinda, India ' NICMAR Business School, NICMAR University, 25/1, Balewadi, Pune (411045), India ' LM Thapar School of Management, Thapar Institute of Engineering and Technology, Patiala, India

Abstract: This paper aims to examine the impact of board gender diversity on priority sector lending and insolvency risk of banks. The study takes 28 banks, 14 public and 14 private sectors, into consideration for the period from 2012 to 2020. The panel data regression is employed to measure the impact of board gender diversity on priority sector lending and insolvency risk. The findings of this study show that a higher percentage of female board members has a significant positive impact on the priority sector lending in banks. It means the women directors prefer to strengthen the weaker economic sectors for the economic growth of the country. Further, female directors are able to minimise the insolvency risk and insulate the banking institutions from being bankrupt. It indicates that with a women-led board of directors, banks can maintain their credit risk under the tolerance limit.

Keywords: gender diversity; insolvency risk; priority sector lending; banking industry; India.

DOI: 10.1504/IJEF.2023.133832

International Journal of Electronic Finance, 2023 Vol.12 No.4, pp.350 - 363

Received: 18 Jul 2022
Accepted: 13 Oct 2022
Published online: 04 Oct 2023 *

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