Evaluating The Performance Of Commercial Banks In India Using Malmquist And Dea Approach
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| Author | : Pallavi Pandey |
| Publisher | : |
| Total Pages | : |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
This paper makes an attempt to find out bank productivity in India during the period 2008 to 2013, that is, the period of Internet technology wave. Data Envelopment Analysis (DEA) technique is used to calculate and decompose the Malmquist index of Total Factor Productivity (TFP) growth into technical change and change in scale efficiency. The study found that the whole banking system in India during the period 2008-2013 had a positive growth which was mainly due to the 'catching-up effect' and the frontier effect. The mean technical efficiency of the in-sample foreign and private banks is somewhat higher than the in-sample public sector banks. Further, public sector banks exhibited decreasing returns to scale, while foreign banks and a majority of private banks exhibited increasing returns or were fully efficient. Finally, the study found that the TFP does not always keep increasing as the technology improved. This suggests that bankers and officials should pay more attention to the strategies taken to assimilate the effect of Internet on the banking sector in order to further improve and sustain their performance in the long run.
| Author | : Don U. A. Galagedera |
| Publisher | : |
| Total Pages | : 31 |
| Release | : 2006 |
| Genre | : |
| ISBN | : |
This paper investigates efficiency using data envelopment analysis (DEA) and productivity growth using Malmquist index in a sample of Indian commercial banks over the period 1995-2002. Using total deposits and operating expenses as input and loans and other earning assets as output in the DEA analysis we observe no significant growth in productivity during the sampled period. The rate of increase in technical efficiency though small is likely to be due to scale efficiency compared to managerial efficiency. In general, smaller banks are less efficient and highly DEA-efficient banks have a high equity to assets and high return to average equity ratios. There has been no growth in productivity in private sector banks where as the public sector banks appears to demonstrate a modest positive change through 1995-2002. Technological change in the public sector banks reveals a growth while the private sector banks experienced a negative growth of almost the same magnitude.
| Author | : Subramanyam T |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2023 |
| Genre | : |
| ISBN | : |
This study proposes a three stage data envelopment analysis model to assess the efficiency of Indian commercial banks. 65 commercial banks comprising public, private and foreign sector banks were evaluated. This study proposed a new methodology to evaluate the efficiency of banks. The performance indicator variable NPA has been used to identify the environment of a bank. The overall technical efficiency is decomposed to scale, environmental risk and pure technical efficiency. The empirical results reveal that public sector banks hurt more from environmental risk inefficiency.
| Author | : Sunil Kumar |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 340 |
| Release | : 2013-10-23 |
| Genre | : Business & Economics |
| ISBN | : 8132215451 |
The goal of this book is to assess the efficacy of India’s financial deregulation programme by analyzing the developments in cost efficiency and total factor productivity growth across different ownership types and size classes in the banking sector over the post-deregulation years. The work also gauges the impact of inclusion or exclusion of a proxy for non-traditional activities on the cost efficiency estimates for Indian banks, and ranking of distinct ownership groups. It also investigates the hitherto neglected aspect of the nature of returns-to-scale in the Indian banking industry. In addition, the work explores the key bank-specific factors that explain the inter-bank variations in efficiency and productivity growth. Overall, the empirical results of this work allow us to ascertain whether the gradualist approach to reforming the banking system in a developing economy like India has yielded the most significant policy goal of achieving efficiency and productivity gains. The authors believe that the findings of this book could give useful policy directions and suggestions to other developing economies that have embarked on a deregulation path or are contemplating doing so.
| Author | : Ram Pratap Sinha |
| Publisher | : LAP Lambert Academic Publishing |
| Total Pages | : 56 |
| Release | : 2014-06-23 |
| Genre | : |
| ISBN | : 9783659562501 |
The present book is a revised version of an University Grants Commission sponsored research project titled "Operating Efficiency of Indian Commercial Banks in the reform Era. This study is the first attempt to use Free Disposal Hull Approach to study commercial bank efficiency in the Indian context. The study also used Data Envelopment Analysis for evaluating the performance of Indian commercial banks.
| Author | : Manoj Kumar |
| Publisher | : |
| Total Pages | : |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
Data Envelopment Analysis (DEA) is widely applied in evaluating the efficiency of banks since it is a method capable of evaluating the efficiency of decision-making units in utilizing multiple inputs to produce multiple outputs. However, some outputs of banks, in fact, possess fuzzy characteristics, while conventional DEA approach can only assess efficiency with a crisp value and is unable to evaluate imprecise data. Theoretically, the fuzzy DEA approach can evaluate banks' efficiency more realistically and accurately since it can take the fuzzy characteristics of inputs and/or outputs into consideration. This study adopts 48 Indian commercial banks as an empirical example to demonstrate the feasibility and the effectiveness in our proposed fuzzy DEA. The results show that the fuzzy DEA approach could not only effectively characterize uncertainty, but may also have a higher capability to discriminate banks' efficiency than the conventional DEA approach.
| Author | : Biresh K. Sahoo |
| Publisher | : |
| Total Pages | : 36 |
| Release | : 2007 |
| Genre | : |
| ISBN | : |
This paper attempts to examine, using data envelopment analysis, the productivity performance trends of the Indian commercial banks for the period: 1997-98 - 2004-05. Our broad empirical findings are indicative in many ways. First, the increasing average annual trends in technical efficiency for all ownership groups indicate an affirmative gesture about the effect of the reform process on the performance of the Indian banking sector. Second, the higher cost efficiency accrual of private banks over nationalized banks indicate that nationalized banks, though old, do not reflect their learning experience in their cost minimizing behavior due to X-inefficiency factors arising from government ownership. This finding also highlights the possible stronger disciplining role played by the capital market indicating a strong link between market for corporate control and efficiency of private enterprise assumed by property right hypothesis. And, finally, concerning the scale elasticity behavior, the technology and market-based results differ significantly supporting the empirical distinction between returns to scale and economies of scale, often used interchangeably in the literature.
| Author | : Santosh K. Behera |
| Publisher | : |
| Total Pages | : 7 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
With the growth of Indian economy, the volume of transactions of commercial banks has grown manifold. The study attempts to investigate the total factor productivity change of four leading Indian commercial banks using non-parametric data envelopment analysis (DEA) and distance function based Malmquist Productivity Index (MPI) over FY2007 to FY2016. The operating approach (or income-based approach) is adopted for input-output selection, viewing the banks as decision-making units (DMU) transforming a bundle of inputs (costs) to produce a set of outputs (revenues). A DMU is considered efficient which maximizes the revenues without increasing the costs. The results indicate that the annual TFP growth registered by these four banks is 3.3%. While two banks recorded productivity growth, the productivity of two other banks declined during the period. Highest productivity growth was recorded during FY2015 and FY2016. TFP growth is further decomposed to Efficiency change (EFFCH) and Technical change (TECHCH) components to study the catchup by less efficient DMUs.
| Author | : Ram Pratap Sinha |
| Publisher | : |
| Total Pages | : |
| Release | : 2013 |
| Genre | : |
| ISBN | : |
In the last two decades, numerous studies have used parametric and non-parametric techniques to estimate commercial bank productivity and efficiency in the Indian context. However, none of them has considered undesirable outputs in their analytical framework. The present paper makes an attempt to fill this gap and evaluates the performance of 49 Indian commercial banks for the period 2006-07 to 2010-11 using Seiford and Joe Zhu (2002) approach, which is essentially a variant of the popular Banker-Charnes-Cooper (BCC) model.
| Author | : Atanu Sengupta |
| Publisher | : Springer Nature |
| Total Pages | : 243 |
| Release | : 2020-04-21 |
| Genre | : Business & Economics |
| ISBN | : 9811544352 |
This book assesses the performance of banks in India over the past several decades, and discusses their current status after fifty years of nationalization. The performance of different categories of banks is evaluated by employing both the traditional ratio analysis and more sophisticated efficiency techniques. The book also explores the market conditions under which Indian banks operate. Going beyond a formal banking study, the book also investigates the causes of the widespread presence of informal credit in parallel to its formal banking counterpart. This approach makes it more comprehensive, unique and closer to the real world. After 50 years of nationalization, India’s banking sector is at a crossroads, given the huge and unabated non-performing assets and talks of consolidation. This book, encompassing both the formal and the predominantly ‘trust-based’ informal credit system, provides essential insights for bankers and policymakers, which will be invaluable in their endeavours to implement meaningful changes. It may also spark new research in the fields of banking performance and efficiency analysis. Lastly, the book not only has significant implications for students of economics, banking, finance and management, but also offers an important resource to support training courses for banking personnel in India.
