The impact of board characteristics and related party transactions on the financial performance of Indian banks

The main aim of this study is to evaluate the impact of board characteristics and related party transactions on the financial performance of Indian listed banks. The study sample comprises 38 banks. The study found that board size and independence significantly influence the return on capital employed, while non-executive board of directors and remuneration positively affect Indian banks' financial performance. The results also reveal that all subsidiary transactions negatively and significantly affect the return on capital employed and earnings per share and positively impact the return on capital employed and profit after tax. This research has theoretical and practical implications for financial managers, investors, and policymakers in Indian banks. Theoretically, it bridges an existing gap in the literature on the banking sector in India. Practically, this research investigates how all key personnel and subsidiaries as proxies for RPTs associate with board attributes to influence banks' financial performance in India.