Efficiency for Indian public sector and private sector banks in India: assessment of impact of global financial crisis Online publication date: Wed, 20-Aug-2014
by Dhananjay Bapat
International Journal of Business Performance Management (IJBPM), Vol. 13, No. 3/4, 2012
Abstract: Indian banking is undergoing major transformation since the financial sector reforms in 1990s. The objective of this paper is to investigate the extent to which global financial crisis has affected the efficiency of Indian banks. We measure production efficiency through application of data envelopment analysis. Data envelopment analysis is non-parametric technique of data envelopment analysis (DEA). In the research, interest income and non-interest income were used as outputs and interest expenses and non-interest expenses were used as inputs. Efficiency scores were calculated for the financial year 2007-2008 to financial year 2009-2010. We have observed that efficiency of banks came down in the year 2008-2009. However, the 2009-2010 shows encouraging results as the efficiency figures have surpassed figures of earlier years. This indicates that Indian banking is on a path of revival.
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