Efficiency of Commercial Banks in India after Global Financial Crisis

K. Ravirajan and K.R. Shanmugam
Additional contact information
K. Ravirajan: Research Scholar (Corresponding Author), Madras School of Economics, Gandhi Mandapam Road, Chennai-600 025 (India)

Working Papers from Madras School of Economics,Chennai,India

Abstract: While the global financial crisis had a cascading effect on all economies and financial sectors of countries, the Indian economy and its finances, particularly its banking system, due to its stringent regulatory and prudent policies. However, in the post crisis period, the scenario changed in the Indian banking because of the mounting pile of bad loans. The main purpose of the study is to estimate the bank specific efficiency utilizing the technical efficiency effect model in the stochastic frontier approach for panel data during the post global financial crisis period, 2009-2018 and find out the factors causing variations in efficiency of Indian banks. Results indicate that despite the consolidation of information technology efforts, the efficiency of the 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 larger capital adequacy ratio or older banks or banks with more branches are less inefficient in generating interest income.

Keywords: stochastic frontier; technical efficiency effect; panel data; Indian banks; financial crisis (search for similar items in EconPapers)
JEL-codes: D24 G21 G28 G34 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2023-11
New Economics Papers: this item is included in nep-eff and nep-ict
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mse.ac.in/wp-content/uploads/2024/02/Working-Paper-254.pdf (application/pdf)

Related works:
Journal Article: Efficiency of commercial banks in India after global financial crises (2021)
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:mad:wpaper:2023-254

Access Statistics for this paper

More papers in Working Papers from Madras School of Economics,Chennai,India Contact information at EDIRC.
Bibliographic data for series maintained by Geetha G ().