Title: Does digitisation affect the technical efficiency of Indian banks?

Authors: Swati Chauhan; Sunil Kumar; Anshumita Singh; Manoj Kumar Jain

Addresses: Centre for Economic Sector, Atal Bihari Institute of Good Governance and Policy Analysis, Bhopal, Sushasan Bhavan, Bhadbada Chouraha, T.T. Nagar, Bhopal, Madhya Pradesh – 462003, India ' Madhya Pradesh State Policy and Planning Commission, First Floor, C-Wing, Vindhyachal Bhavan, M.P. – 462004, India ' Centre for Economic Sector, Atal Bihari Institute of Good Governance and Policy Analysis, Bhopal, Sushasan Bhavan, Bhadbadan Chouraha, T.T. Nagar, Bhopal, Madhya Pradesh – 462003, India ' Centre for Economic Sector, Atal Bihari Institute of Good Governance and Policy Analysis, Bhopal, Sushasan Bhavan, Bhadbadan Chouraha, T.T. Nagar, Bhopal, Madhya Pradesh – 462003, India

Abstract: This study aims to examine the impact of digitisation on the technical efficiency of Indian banks. It has sampled public and private sector banks from 2001 and 2019 and applied panel data regression to establish the relationship between variables. The results indicate that digitisation in the Indian banking sector has an overall negative impact on the technical efficiency of banks, and there is no problem of endogeneity between the variables. Further, the study has observed that the technical efficiency of private banks has improved more than the public sector banks over the years. Therefore, it contributes to the literature by stressing the adoption of digitisation by a majority of customers for better delivery of banking services because the low adoption rate is negatively affecting the efficiency of the banks. Future researchers can explore digitisation in India's cooperative banks and microfinance institutions as they mainly serve the unbanked and rural areas.

Keywords: digitisation; technical efficiency; public sector banks; private banks; panel data regression.

DOI: 10.1504/IJEF.2022.126480

International Journal of Electronic Finance, 2022 Vol.11 No.4, pp.291 - 305

Received: 05 Aug 2021
Accepted: 06 Dec 2021
Published online: 26 Oct 2022 *

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