Convergence in efficiency and technology gap of Indian banks: implication of GFC and COVID-19

Sayed Mohammad Minhaj Uddin () and Shakeb Akhtar ()
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Sayed Mohammad Minhaj Uddin: Jamia Millia Islamia
Shakeb Akhtar: University of Technology and Applied Science

Quality & Quantity: International Journal of Methodology, 2025, vol. 59, issue 6, No 6, 5043-5062

Abstract: Abstract This paper examines the convergence of efficiency and technology gaps in Indian banks. Using meta-frontier data envelopment analysis, we assess efficiency and apply β-convergence and σ-convergence from growth convergence literature to investigate the convergence process. The analysis uses unbalanced panel data for the period 2000–2023 and explores the impact of the global financial crisis (GFC) and COVID-19 on convergence. Our results show strong β-convergence and σ-convergence in both intermediation and operating efficiency during the pre-GFC phase. However, both crises slowed β-convergence in efficiency for overall banking sector and different ownership groups, while limited effects on σ-convergence were found, except in case of public sector banks. Additionally, we find β-convergence and σ-convergence in both the intermediation and operating technology gaps, suggesting increasing technological homogeneity in the banking sector. However, no significant influence of two crises was observed on the convergence of the technology gap.

Keywords: Indian banks; DEA; Convergence; Efficiency; Metafrontier; GFC; COVID-19 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11135-025-02195-7

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