Title: Impact of market competitiveness and risk management of NPAs of Indian banks on its efficiency

Authors: Jagjeevan Kanoujiya; Shailesh Rastogi

Addresses: Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune, Maharashtra, 411042, India ' Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune, Maharashtra, 411042, India

Abstract: The efficient banking system of a country is an important factor of its economic growth. Hence, many banking sector reforms have been undertaken in India to improve market power and efficiency of the Indian banks. This study aims and contributes to the banking literature by providing insight about the impact of market competitiveness and risk management on technical efficiency (TE) using the sample of 34 banks in India over the period 2016-2019. The static and dynamic models of panel data have been performed for regression analysis. Competitiveness and TE are assessed by Lerner's index and Data Envelope Analysis (DEA), respectively. The risk management of non-performing assets (NPAs) is taken as provision coverage ratio (pcr). The findings of the study suggest that market competitiveness and risk management of NPA do not affect efficiency of Indian banks. This paper exerts the important policy implications through empirical investigation in the study.

Keywords: efficiency; Lerner's index; competition; banks; DEA; data envelope analysis.

DOI: 10.1504/IJMEF.2022.124962

International Journal of Monetary Economics and Finance, 2022 Vol.15 No.2, pp.173 - 193

Received: 08 Apr 2021
Accepted: 04 Dec 2021
Published online: 18 Aug 2022 *

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