Understanding the Forward and Backward Linkages in Banking Sector: Application of Input-Output Method

Abstract

Banking Sector provides the backbone of the financial Sector in any country. However a successful banking sector depends on the strength of the forward and backward linkage of its input and product use that shows the value additions the sector is making to any economy. The emergent and recurring crisis in the financial sector throws a monkey wrench into operation that makes it difficult of revival. It is therefore imperative that an attempt is made to assess the structural dependencies of a sector that enables its sustenance and revival strength .. Input-output analysis is largely used for attaining this objective. In this paper, data from the Indian banking sector has been leveraged for interpretation and with the help of inter-industry transaction tables.