Technical Efficiency of Banking Industry in India: A Longitudinal Analysis
Published: 2019
Author(s) Name: Rajiv Khosla and Ajay Khurana |
Author(s) Affiliation: Former Professor, Chandigarh Group of Colleges, Mohali, Punjab.
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Abstract
This paper examines technical
efficiency and its correlates in
respect of the banking industry
in India during 1995-2016. Using
Data Envelopment Analysis
to the RBI dataset for 51 banks,
it revealed that technical efficiency
score for all the banks
measured at 0.8949,in turn,
meant that the inputs of these
banks were required to be reduced
by 10.51 per cent. Managerial
under-performance (pure
technical inefficiency) accounted
for 5.27 percentage
points and the remaining
amount by scale inefficiency.
Thus, both managerial and
scale inefficiencies contributed
almost equally in the technical
inefficiency. Public sector
banks, private sector banks and
foreign banks were found to
operate at 89.33, 87.64 and
97.76 per cent level of overall
technical efficiency respectively.
Keywords: N.A.
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