International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

Frequency: 12
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 Volume 11, Issue 8 (August 2024), Pages: 220-228

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 Original Research Paper

The impact of Reserve Bank of India officials' resignations on financial sector returns: An event-study analysis

 Author(s): 

 Ahmad Bash 1, *, Reyadh Faras 2, Abdullah M. Al-Awadhi 1, Musaed S. AlAli 1

 Affiliation(s):

 1Insurance and Banking Department, College of Business Studies, Public Authority for Applied Education and Training, Ardiya, Kuwait
 2Economics Department, College of Business Administration, Kuwait University, Al-Shadadiya, Kuwait

 Full text

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 * Corresponding Author. 

  Corresponding author's ORCID profile: https://orcid.org/0000-0002-4920-3867

 Digital Object Identifier (DOI)

 https://doi.org/10.21833/ijaas.2024.08.023

 Abstract

In this study, we examine the short-term effects of the resignations of high-ranking officials from the Reserve Bank of India (RBI) on financial sector returns. We apply a commonly used event-study method to analyze financial sector stocks during the period from February 16, 2018, to July 22, 2019. The findings reveal that the financial sector was sensitive to the resignations of RBI Governor Urjit Patel and Deputy Governor Viral Acharya, both strong supporters of the RBI's independence. Patel’s resignation caused a significant negative impact on cumulative abnormal returns, while Acharya’s resignation led to a significant positive impact on these returns. Our results suggest that central bank independence (CBI) may have varied short-term effects on financial sector performance. It is, therefore, important for both politicians and investors to understand the implications of our findings in order to fully grasp the political and economic consequences of central bank independence and the credibility of monetary policy on financial sector outcomes. For future research, we suggest exploring the effects of these resignations on other financial indicators, such as bond yields, exchange rates, and interest rates, using alternative methods.

 © 2024 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords

 Central bank independence, Financial sector returns, Event-study method, Cumulative abnormal returns, Resignation effects

 Article history

 Received 27 April 2024, Received in revised form 25 August 2024, Accepted 27 August 2024

 Acknowledgment

No Acknowledgment.

 Compliance with ethical standards

 Conflict of interest: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

 Citation:

 Bash A, Faras R, Al-Awadhi AM, and AlAli MS (2024). The impact of Reserve Bank of India officials' resignations on financial sector returns: An event-study analysis. International Journal of Advanced and Applied Sciences, 11(8): 220-228

 Permanent Link to this page

 Figures

 Fig. 1 Fig. 2 Fig. 3 Fig. 4 

 Tables

 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 

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