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The Relationship Dilemma: Why Do Banks Differ in the Pace at Which They Adopt New Technology? / Prachi Mishra, Nagpurnanand R. Prabhala, Raghuram G. Rajan.
- Format:
- Book
- Author/Creator:
- Mishra, Prachi.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w25694.
- NBER working paper series no. w25694
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Relationship Dilemma
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2019.
- Summary:
- India introduced credit scoring technology in 2007. We study its adoption by the two main types of banks operating there, new private banks (NPBs) and state-owned public sector banks (PSBs). NPBs start checking the credit scores of most borrowers before lending soon after the technology is introduced. PSBs do so equally quickly for new borrowers but very slowly for prior clients, although lending without checking scores is reliably associated with more delinquencies. We show that an important factor explaining the difference in adoption is the stickiness of past bank structures and associated managerial practices. Past practices hold back better practices today.
- Notes:
- Print version record
- March 2019.
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