Title: Efficiency for Indian public sector and private sector banks in India: assessment of impact of global financial crisis

Authors: Dhananjay Bapat

Addresses: C-2/10, NIBM Campus, NIBM Post Office, Khondwe Khurd, Pune 411048, India

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.

Keywords: global crises; financial crises; Malmquist DEA; data envelopment analysis; production efficiency; efficiency scores; public sector banks; private sector banks; India; banking; financial sector; reforms; non-parametric techniques; interest income; non-interest income; outputs; interest expenses; non-interest expenses; inputs; business performance; performance management; efficiency management; service sector organisations.

DOI: 10.1504/IJBPM.2012.047299

International Journal of Business Performance Management, 2012 Vol.13 No.3/4, pp.330 - 340

Published online: 20 Aug 2014 *

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