—From traditional times the Z score values have
been constantly used for prediction of Bankruptcy. This has
been vital to both the lenders and investors whose returns are
based on solvency estimates. The terms of credit have gone a U
turn from the traditional times to the modern scenario today.
The basic concern of prediction is to evaluate the terms of
credit and ensure repayment safely. Z score has been used as a
tool to evaluate the credibility of the firms. This paper provides
the Z score value for the public sector banks. This value is
useful when these banks demand loans from the RBI or any
other funding agency. The usage of back propagation neural
network is to forecast the internal parameters of Z score and
then use these internal parameters to forecast the Z score value
up to 2020. Thus the paper emphasizes the usage of BPNN for
prediction of bankruptcy for public sector banks in India.
—Bankruptcy, internal parameters of Z score
Prediction, Z score value.
Roli Pradhan is with the Department of Management, NITTTR, Bhopal
Cite: Z Score Estimation for Indian Banking Sector, "Roli Pradhan," International Journal of Trade, Economics and Finance vol.5, no.6, pp. 516-520, 2014.