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Indian Journal of Finance

ISSN: 0973-8711 Frequency: Monthly Peer Review: Double-blind Published since: 2007 Language: English
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Original Article

Open Access Original Article

Efficiency of Private Sector Banks in India

T. Narayanaswamy1,  A. P. Muthulakshmi2

1 Part Time Research Scholar, Bharathiar University, Coimbatore - 641 046 Tamil Nadu

2 Principal, CMS Academy of Management and Technology, Chinnavedampatti - 641 006, Tamil Nadu

Volume 8
Issue 10
Pages 33–47
Year 2014
Received: June 17, 2014 Accepted: Aug. 2, 2014 Published: Oct. 1, 2014
Abstract

This paper examined the relative efficiency of all the private sector banks in India from 2008 to 2013 using the data envelopment analysis (DEA) methodology. Axis Bank, Kotak Mahindra Bank, and ICICI Bank were relatively efficient in terms of technical efficiency, pure technical efficiency, and scale efficiency. The average (overall) technical inefficiency score during the study period was found to be 6%. In terms of pure technical efficiency, apart from the above three banks, HDFC Bank and Nainital Bank were also relatively efficient. The average (overall) pure technical inefficiency score during the study period was found to be 5%. Positive correlation ranging from 0.7 to 0.95 was observed between return on assets and different types of efficiencies during the study period (except for the year 2008-09). Negative correlation ranging from -0.3 to 0.5 was observed between non - performing assets ratio and different types of efficiencies during the study period (except for the year 2008-09).

Keywords Data Envelopment Analysis Technical Efficiency Pure Technical Efficiency Scale Efficiency Private Sector Banks
How to Cite

T. Narayanaswamy, A. P. Muthulakshmi (2014). Efficiency of Private Sector Banks in India. Indian Journal of Finance, 8(10), 33–47. https://doi.org/10.17010/ijf/2014/v8i10/71847

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