Title: Performance measurement of Indian banking system: non-radial data envelopment analysis approach

Authors: Preeti; Supriyo Roy

Addresses: Department of Management, Birla Institute of Technology-Mesra, Ranchi, Jharkhand-835215, India ' Department of Management, Birla Institute of Technology-Mesra, Ranchi, Jharkhand-835215, India

Abstract: Global economy coupled with real time banking reforms in area of asset quality, capital adequacy, and diversification of operations, it is critical for any banks to continuously monitor their operational efficiency. It is imperative for Indian banking system to consider multiple factors affecting bank's performance while measuring efficiency. Traditional methods like ratio analysis are no more a workable solution for measurement of overall efficiency. Under this backdrop, academic researchers and business managers continuously opt for data envelopment analysis (DEA) models as one of the popular approaches to analyse and evaluate performance. Present study intends to compute efficiency of Indian banks by employing non-traditional (non-radial) DEA model. Comparison of efficiency values between banking ownership with focus on offering improvement plan for inefficient banks is one of the significant contributions of this study. The outcome of the study points towards improvement initiative(s) that may serve as future reform policies in banking context.

Keywords: data envelopment analysis; DEA; Indian; banking system; non-radial model; operational efficiency; performance measurement.

DOI: 10.1504/IJBEX.2024.143193

International Journal of Business Excellence, 2024 Vol.34 No.3, pp.335 - 356

Received: 22 Apr 2020
Accepted: 30 May 2021
Published online: 09 Dec 2024 *

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