International Journal For Multidisciplinary Research

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Influence of Budgetary Provisions and Monetary Policy on Credit Risk Perception and Behavioral Traits of Bank Customers: A Study of Public Sector Banks in Madhya Pradesh

Author(s) Girish Mainrai, Dr. Sanjay Payasi
Country India
Abstract This research examines how fiscal and monetary policy measures, particularly Union Budget 2024–25 provisions and RBI monetary policy interventions, influence the behavioral and psychological traits of banking customers in relation to credit risk management. With rising household debt and dynamic economic conditions, understanding customer attitudes towards borrowing, repayment, and risk perception is critical for financial stability. The study is focused on public sector banks in Madhya Pradesh.
Using a structured primary survey and institutional data, the study explores behavioral dimensions such as risk aversion, financial literacy, emotional stability, and trust in banking policies. Secondary data sources include RBI reports, Union Budget documents, and public bank performance reviews. A mixed-methods approach combining descriptive statistics, ANOVA, factor analysis, and regression modeling was applied to assess relationships between policy variables and customer behavior.
Findings suggest that customers’ perceptions of credit risk are shaped significantly by macroeconomic signals such as interest rate changes, fiscal subsidies, inflation trends, and public sector bank restructuring policies. Behavioral traits like optimism bias, overconfidence in creditworthiness, and fear of institutional processes emerged as key psychological drivers. Notably, credit behavior differed across demographic segments, particularly in terms of income level, age group, and education.
The study provides practical implications for policymakers and banks. It advocates for incorporating behavioral risk models in public lending practices, improving financial literacy campaigns in line with budget announcements, and adopting human-centric strategies in bank credit policy design. This interdisciplinary work bridges economic policy with behavioral finance and aims to contribute to a resilient, inclusive banking ecosystem.
Published In Volume 7, Issue 3, May-June 2025
Published On 2025-06-05
DOI https://doi.org/10.36948/ijfmr.2025.v07i03.46603
Short DOI https://doi.org/g9pzr4
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