ABSTRACT
Banks in the South Asian region are the fulcrum of economic growth and development as they provide means to development credit and working capital, trade and infrastructure, finance, and are seen as custodians of the trust in the financial system. This chapter aims to study the nature of banking sector linkages for the banks in South Asia. The dependence structure between deposits and lending rates individually for the banks of the South Asian countries is studied using copula functions and Diebold and Yilmaz methodology. Results indicate poor levels of banking integration in the region as the dependence parameter for both deposits and lending rates was around 0 for the sample countries, thereby confirming poor banking sector integration in the region.
