REVISITING THE ROLE OF DOMESTIC INSTITUTIONAL INVESTORS IN THE INDIAN BANKING SECTOR: GROWTH CATALYSTS AND STRATEGIC OUTLOOK

DOI: https://doie.org/10.10399/APER.2025816215

Authors:

P. Swapna, Dr. T.Lokeswara Rao, Dr. M. Kameswara Rao,

Keywords:

Domestic Institutional Investors (DIIs), Indian Banking Sector, Financial Stability, Investment Trends, Market Capitalization, Policy Impact

Abstract:

Domestic Institutional Investors (DIIs) have progressively gained prominence in the Indian financial ecosystem, particularly within the banking sector. Their investments, marked by a long-term focus and strategic orientation, have significantly influenced the sector's capital stability, market behavior, and governance models. This study investigates the evolving role of DIIs in shaping the Indian banking sector's growth, resilience, and future trajectory. Drawing upon both primary and secondary data, this paper evaluates DII investment trends from 2018 to 2024, examines retail investor sentiment, and explores regulatory mechanisms that guide DII engagement. The results indicate a growing alignment between DII strategies and banking sector modernization, particularly in areas such as digital banking and capital adequacy. Additionally, the findings highlight the interdependent dynamics between institutional flows and retail confidence. The study provides actionable insights for investors, policymakers, and banking strategists.

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