Analysis of Operational Efficiency in Indian Banks: A Comparative Study

Jagdish Raiyani

Journal of Commerce and Trade, 2011, vol. 6, issue 2, 80-88

Abstract: Many firms in the service industry face the problem of disparate results in terms of efficiency. This problem is a cause of concern for many big organizations such as banks, hotels, courier companies, and so on. In particular, the last decade has witnessed continuous changes in regulation, technology and competition in the global financial services industry, and Indian banks are no exception. Rising cost-income ratios and declining profitability reflect increased competitive pressure. To assess the stability of the banking system, it is therefore crucial to benchmark the performance of banks operating in India. An efficient banking system contributes in an extensive way to higher economic growth in any country. Thus, studies of banking efficiency are very important for policy makers, industry leaders and many others who are reliant on the banking sector. The present study investigates the technical efficiency of Indian banks, segmented in terms of ownership. For this purpose, the data envelopment analysis (DEA) model was used with five input variables (viz. borrowings, deposits, fixed assets, net worth, and operating expenses) and four output variables (advances & loans, investments, net interest income, and non-interest income), and the efficiency scores were calculated for a sample of forty-nine major banks operating in India.

Keywords: Financial Services; Banking Efficiency; Data Envelopment Analysis; Technical Efficiency; Borrowings; Deposits. (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.jctindia.org/index.php/jct/article/view/o11-jrr (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jct:journl:v:6:y:2011:i:2:p:80-88

Access Statistics for this article

Journal of Commerce and Trade is currently edited by Dr. Himanshu Agarwal

More articles in Journal of Commerce and Trade from Society for Advanced Management Studies
Bibliographic data for series maintained by Dr. Himanshu Agarwal ().