A Study on Technical Efficiency of Public Sector Banks in India
Sangeetha R.,
Jain Mathew
Issue:
Volume 2, Issue 2, April 2013
Pages:
15-21
Abstract: Banking companies in the service sector exhibit the problem of distinct results in terms of efficiency. This problem is a cause of concern for many big organizations in the service sector like hotels, courier companies, hospitals, banks and so on. In particular, the last decade has observed continuous amendment in regulation, technology and competition in the global financial services industry, and Indian banks are no exception. To measure the stability, sustainability and profitability of the banking system, it is therefore crucial to scale the operations of banks performing in India. A well-organized banking system will provide an extensive way to higher economic growth in any country. Thus, evaluating the technical efficiency is important to depositors, owners, potential investors, managers and to policy makers. The present study investigates the technical efficiency of public sector banks in India by considering the study period between 2008-09 and 2010-11and using the data extracted from RBI website (www.rbi.org.in) and IBA website (www.iba.org.in). For this purpose, the data envelopment analysis (DEA) was used with two input variables (Interest expenses and operating expenses) and two output variables (interest income and other income). The efficiency scores were calculated for a sample of twenty-six public sector banks operating in India. The result shows that Corporation Bank, State Bank of India and IDBI were consistently performed efficiently in all the years under study.
Abstract: Banking companies in the service sector exhibit the problem of distinct results in terms of efficiency. This problem is a cause of concern for many big organizations in the service sector like hotels, courier companies, hospitals, banks and so on. In particular, the last decade has observed continuous amendment in regulation, technology and competi...
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