Efficiency of commercial banks in India after global financial crises

K. Ravirajan and K.R. Shanmugam
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K. Ravirajan: Madras School of Economics, India

Theoretical and Applied Economics, 2021, vol. XXVIII, issue 3(628), Autumn, 65-82

Abstract: This study contributes to the bank efficiency literature by estimating the technical efficiency of banks in four different ownership groups in India during the post global financial crisis period, 2009-2018 utilizing the technical efficiency effects model for panel data. It finds that despite the consolidation of information technology efforts, the efficiency of Indian banking industry deteriorated during the post global financial crisis period. This may be due to the mounting pile of non-performing assets. Interestingly, the public banks seem to be more efficient than their private counterparts. The results also indicate that banks with lager capital adequacy ratio or older banks or banks with more branches are less inefficient in generating interest income. It is our hope that findings of this study would be useful to international agencies and other stakeholders in evaluating and improving the performance of Indian banks.

Keywords: stochastic frontier; technical efficiency effect; panel data; Indian banks; financial crisis. (search for similar items in EconPapers)
Date: 2021
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Working Paper: Efficiency of Commercial Banks in India after Global Financial Crisis (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:3(628):y:2021:i:3(628):p:65-82

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