Abstract
The purpose of this study is to examine how Indian commercial banks' performance can be improved by determinants of working capital management. This study uses both static models Generalised Moments Method (GMM) and pooled, fixed, and random-effects. The study is based on balanced panel data for 98 Indian banks from 2008 to 2018. Performance is defined by two indicators, namely, return on assets (ROA) and return on equity (ROE). While, working capital cycle, profit after tax, assets size, financial leverage, quick ratio, current ratio, return on capital employed, return on total assets, net profit margin, and monetary policy rate are used as independent variables. The results showed that net profit margin, profit after tax, monetary policy, and working capital cycle are the most important working capital factors that influence Indian commercial banks' performance measured by (ROA). Moreover, among the working capital, the results showed that current ratio, assets size, net profit margin ratio, and return on capital employees have significant positive effects on (ROE). The article's novelty and importance come from its recommendation that policymakers in emerging markets should motivate and enable managers and stakeholders to pay more attention to working capital by raising consumer awareness and increasing knowledge disclosure.