An Analysis of Revenue Maximising Efficiency of Public Sector Banks in the Post-Reforms Period

Ombir Singh () and Sanjeev Bansal ()
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Ombir Singh: Department of Economics, Kurukshetra University, Kurukshetra, Haryana, India
Sanjeev Bansal: Department of Economics, Kurukshetra University, Kurukshetra, Haryana, India

Journal of Central Banking Theory and Practice, 2017, vol. 6, issue 1, 111-125

Abstract: The paper investigates and compares the performance of the Indian public sector banks (PSBs) based on revenue maximising efficiency in the deregulation period from 2001-02 to 2012-13. Several efficiency estimates viz., overall technical efficiency, pure technical efficiency and scale efficiency of individual banks are calculated using Data Envelopment Analysis (DEA). The empirical findings indicate the presence of managerial and scale inefficiencies in the operation of the most of the PSBs. Applying the Tobit regression analysis, the paper also assesses the impact of different environmental factors, like profitability, the level of non-performing assets, size etc. on the efficiency of PSBs. It is observed that banks with high profitability, low level of non-performing assets, and relatively larger size are more technically efficient.

Keywords: Public sector banks; Efficiency; DEA; Tobit model. (search for similar items in EconPapers)
JEL-codes: C24 C61 G21 (search for similar items in EconPapers)
Date: 2017
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