Examining the Performance of Banks in India: Post Transition Period

Abstract:     
This paper evaluates the performance of the Indian banking sector during the post transition period (1997-2005). The productive performance, scale elasticity, efficiency and capacity utilization parameters are calculated using Data Envelopment Analysis (DEA). The empirical results calibrated through these models are analytic on several fronts. The positive trend of the reform process is visible through the increase in technical efficiency over the years of the post transition period. The cost efficiency parameters state that the nationalized banks are yet to exercise their cost minimizing principles compared to the other banks. Finally, the empirical findings show a significant difference between the technology and the market-based hypothesis. These results are in line with the distinction between economies of scale and the returns to scale.

Accepted Paper Series